Photo: Bursa Malaysia (Malaysian stock exchange) building in Bukit Kewangan, Kuala Lumpur, Malaysia on January 17, 2019. Syahtuah Mohamed /

Islamic Finance

Malaysia’s Islamic capital market shrinks 0.67 pct in 2018 on lower market capitalisation of securities

The size of Malaysia’s Islamic capital market nudged down 0.67 percent to 1,880.73 billion ringgit ($459.69 billion), according to Salaam Gateway calculation of data from the Securities Commission, released on Thursday.

This follows the 8.58 percent drop in market capitalisation of Shariah-compliant securities, which reached 1,036.52 billion ringgit in 2018 from 1,133.83 billion ringgit a year earlier.

This decrease was offset by an 11.13 percent rise in sukuk outstanding, from 759.64 billion ringgit in 2017 to 844.21 billion ringgit last year.

This increase helped prop up the share of the Islamic capital market to 60.55 percent of Malaysia’s total capital market in 2018 from 59.19 percent in 2017.

Overall, Malaysia’s capital market contracted around 3 percent, from 3.2 trillion ringgit in 2017 to 3.1 trillion ringgit in 2018.


Total sukuk issued by the sovereign and corporates in Malaysia rose 18.5 percent to 199.9 billion ringgit.

Corporate issues plunged 17.08 percent, from 87.65 billion ringgit in 2017 to 72.68 billion ringgit last year.

Corporate sukuk made up 68.92 percent of total bonds and sukuk issuances, down from 70.19 percent in 2017.

Total sukuk issued was offset by a bigger value of government issues, which grew 57 percent to 127.22 billion ringgit.

Overall, sukuk issued accounted for a lower 51.8 percent of Malaysia’s bonds and sukuk issuances from 53.05 percent in 2017.

Sukuk outstanding reached 844.21 billion ringgit from 759.64 billion ringgit, a rise of 11.13 percent.

Sukuk outstanding accounted for 60.05 percent of total bonds and sukuk outstanding, compared to a lower 58.8 percent in 2017.


In the funds sector, Shariah-compliant assets under management (AuM) dropped 7.74 percent to 158.83 billion ringgit.

Islamic AuM accounted for 21.36 percent of the total fund management industry, compared to 22.18 percent in 2017.


The number of Islamic exchange-traded funds (ETFs) went up by 1, from 5 to 6 in 2018.

Market capitalisation of these 6 Islamic ETFs stood at 0.55 billion ringgit compared to 0.47 billion ringgit in 2017.

The percentage market capitalisation of Shariah-compliant ETFs to the total industry increased to 27.78 percent from 24.2 percent in 2017.


The number of Islamic real estate investment trusts (REITs) was flat at 4.

However, their market capitalisation dropped 9.86 percent to 17.19 billion ringgit.

Overall, Islamic REITs made up 41.49 percent of Malaysia’s REITs, up from 41.02 percent in 2017.

(Reporting by Emmy Abdul Alim; Editing by Seban Scaria

($1 = 4.0913 Malaysian ringgit)

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