mohd razif bin abd kadir : malaysiaa€™s position as an international islamic financial centre closing keynote address by mr mohd razif bin abd kadir, deputy governor of the central bank of malaysia, at the malaysian islamic finance - issuers and investors forum 2006, kuala lumpur, 15 august 2006. * * * it is my pleasure to be here at the end of the two - day malaysian islamic finance - issuers and investors forum 2006. the joint hosting of this forum by bank negara malaysia, the securities commission, labuan offshore financial services authority ( lofsa ) and bursa malaysia is testimony to the strong cooperation and close collaboration of the key regulatory and market authorities in the financial services sector in malaysia. i would regard the forum as a successful one. the 14 sessions and the 54 distinguished panellists and 8 moderators from various backgrounds and experience have deliberated and focused on issues that are relevant to both the issuers and investors, who are among the key stakeholders of islamic finance. my closing remarks today will centre on summarising the issues and suggestions that have been put forward to further enhance malaysia's position as an international islamic financial centre, and to reiterate and reaffirm the strong commitment of the government and the relevant regulatory agencies to spearhead this mifc initiative. in many of the sessions, malaysia has been recognised as having in place a strong foundation and the right pre - requisites to become an effective and efficient islamic financial hub. among them are : i. 23 years of experience in regulating and developing the islamic financial system. ii. strong islamic financial institutions comprising 12 islamic banks. of this, 3 are foreign islamic financial institutions and 7 are islamic subsidiaries of banking groups. there are also several islamic windows of conventional banking institutions which are also lead arrangers of islamic financial instruments. in the takaful industry, there are 9 takaful operators. iii. a strong islamic capital market with 89 islamic unit trust funds, 85 percent of bursa malaysia's counters are shariah approved counters and 46 percent of the corporate bond market are islamic bonds or sukuks. iv. a well established and comprehensive regulatory and shariah governance framework in accordance with best practices, together with a tax neutrality policy. v. a comprehensive legal and shariah infrastructure. vi. well endowed with the critical mass and a wide array of islamic products and services. vii. talent development infrastructure. viii. a vibrant and

this integration process in asia. the bilateral trade and investment relationships between korea and malaysia over the recent years has continued to increase with trade now averaging rm45 billion per annum. both countries have already benefited from the growing production networks within the region as well as from the numerous trade and investment opportunities from an increasingly open and liberal business environment. investment linkages, though still relatively modest, have been on an upward trend since 2006. korean investment in malaysia is predominantly in the manufacturing sector, particularly the electrical and electronics sub - sector. the opportunity for further co - operation in this area is vast. korea, as a nation known for its knowledge - based and innovative capabilities, can leverage on the liberal investment climate offered by malaysia to diversify into new growth areas such as green technology and biotechnology. in the area of finance, malaysia now has a well - developed financial system, with deep capital markets including a comprehensive system of islamic finance. the malaysian bond market is the fourth largest in asia in terms of volume after japan, china and korea. more than 55 % of the outstanding bonds are shariah - compliant and the sukuk market is the largest in the world. in 2008, the export - import bank of korea and industrial bank of korea successfully raised a total of rm2 billion via bond issuance in the malaysian bond market. moving forward, the sukuk market represents an important channel to reinforce regional financial integration. it presents an opportunity for korean corporations to raise financing and issue sukuks out of malaysia. in addition, korean investors can also participate in the wide range of islamic financial instruments in the malaysian financial markets, including from more than 150 islamic unit trusts, islamic reits, wholesale mutual fund products and other islamic structured products. in addition to robust economic ties and potential financial links, korea and malaysia enjoy a growing mobility of talents. with the rise in korean investment in malaysia, this has led to an increase in korean expatriates. koreans are also coming to malaysia as students and to participate in our malaysia my second home programme. in addition, the korean wave, which spread to malaysia in early 2000s, has contributed to make our country more aware of the korean culture and traditions, thus promoting a better understanding between these two countries. prospects for the malaysian economy malaysia is an economy that is transitioning into a new phase of development. in the current environment, our economy is now firmly on the recovery path. this year, the malaysian economy is projected to grow in the region of 5 %