Opportunities in Islamic Equities

Islamic Finance is getting more and more popular nowadays. Many investors are talking about Islamic equity market. So what is Islamic equity market? Islamic equity market is the equity market that is managed using Syariah laws, which means that the market is managed using Islamic rules. Although the market is managed using Islamic rules, this does not mean the market is only for those who are Muslims. The market is opened to all. With the effort of Malaysia to become a major Islamic hub, this has brightened the future of Islamic equities in the country. The raising of other Islamic countries such as those Islamic countries in the Middle East has attracted investors.

Tan Sri Zarinah Anwar, Securities Commission chairman, strongly believes that the Islamic equity market offers strong opportunities for growth. In her speech at the London Sukuk Summit 2009, she shared with the audience that the instrument such as Syariah-compliant exchange-traded funds, real estate investment trusts (REITs) and structured products are attracting strong interest. The interest is so strong that there are some conventional REIT had converted the conventional structure to one that is Syariah-based.

Definitely there are reasons why Syariah-based structure is adopted in the company. According to Axis REIT Managers Bhd chief executive officer-cum-executive director Stewart LaBrooy, the Syariah-compliant status will enable them to broaden the pool of investors. Besides that, it will help to attract the investment from Middle East countries. China-based Xingquan, which is the first company from China to list on the Malaysian stock exchange also applied for and receive pre-initial public offering Syariah-compliant status for its shares. This will attract those individual or institutions investors who are seeking Syariah-compliant investments. If we look around, we can see that there are many companies are going for Syariah-based structure. For example, Public Islamic Bank and Takaful are the companies which are Syariah-compliant.

The companies have seen the future of Islamic market and they are targeting on it. Certainly they have analyzed the opportunities and risks before they make any decision. They will not make any decision that jeopardizes the company. If you are still new to the market and have the intention to invest, why not consider investing in Islamic equity?


Reference
Opportunities in Islamic equities, The Star. (7 July 2009).