ISLAMIC ASSET MANAGEMENT

BIMB Investment Management Bhd CEO Najmuddin Mohd Lutfi:

The tax incentive for fund management companies managing Islamic funds will end in 2020.

This tax incentive was introduced as part of the Malaysia International Islamic Financial Centre’s (MIFC) initiatives to make Malaysia the world’s Islamic Finance marketplace.

Since the introduction of the incentive, 11 foreign/global fund houses have established their presence in Malaysia, providing breadth and depth of Islamic funds and deepening the Islamic capital market and also creating job opportunities for Malaysians.

Government support on Islamic fund management companies is crucial for the long term and sustainable growth of the industry.

Separately, we hope to see alternative assets such as leasing and financing being recognised as securities for Islamic fund management companies so that they can expand its product offerings and introduce new Islamic asset classes to investors.

Currently, Islamic fund management companies can only offer transferable securities, which include equities and sukuk; liquid assets such as deposits; and money market assets, units or shares in collective investment schemes as well as derivmanagement atives.

For Islamic fund companies to be competitive, they need to be able to offer alternative asset classes with different risk/ reward profile.

We hope there would be incentives to encourage e-wallet or e-payment platform to collaborate with Islamic fund management companies to offer micro investment schemes to the under-served Bottom-40 households, who represent the lowest-earning group in

Malaysia.

We also hope there would be a specific fund allocation by the Government and pension funds for syariah environmental, social and governance (ESG) and sustainable investing to encourage Islamic fund management companies to build capabilities in sustainability investing and offering of shariah ESG investment products across asset classes, domestically and internationally.

On the Private Retirement Scheme (PRS) space, we hope to see an opening for syariah ESG and sustainable investing fund managers to participate as PRS providers.

In addition, we hope the previous incentive to encourage those under 25 to invest be restored, especially for those who invest Islamic PRS funds.