1

Malaysia as a Hub for Islamic Wealth Management

THE INTERNATIONAL FINANCIAL PLANNING ADVISORS CONFERENCE 2008

Mohd Willieuddin LimDirector, Global Markets

Sunway Pyramid Convention Center22-24 February 2008

2

Contents

Section 1 History of Islamic Finance Industry 3

Section 2 The Shape of the Modern Industry 5

Section 3 Islamic Wealth Management 8

Section 4 Why Islamic Wealth Management 12

Section 5 Malaysia as a Hub 24

Section 6 Opportunities & Issues 33

Section 7 Conclusion

Important Notice

3

History of Islamic Finance Industry

4

• A comprehensive financial system that adheres to Islamic principles;• It was the financial system of the known world developed under the reign of the

Muawiyad and the Abbasid Empires from the year 661 until the year 850;• It continued to be a vibrant and significant financial system of the known world

spearheaded by great Islamic empires in Andalusia (Spain) until the year 1031, in Granada until the year 1492, in the Malaccan Sultanate (1511) and in the Ottoman (Turkey) until the year 1918;

• It is a system which has existed for the last 1,426 years. We are only relearning what is available under the system in the last 40 years.

• Broadly refers to financial market transactions, operations and services that comply with Islamic rules, principles and codes of practices. The laws and rules of the religion require certain types of activities, risks or rewards to be either prohibited or promoted.

The Islamic Financial Industry is……

Islamic Capital Market – A Tradition

5

Islamic Financial Market – The Evolution…

The evolution of Islamic Financial market is contributed by introduction of a competitive and comprehensive product and service offerings.

6

• The world Muslim population today is estimated at about 1.8 billion, representing a sizeable 28% of total world population of 6.6. billion.

• Islamic banking and finance has become a force to be reckoned with in the global economic scenario. It often forms part of the equation in international finance, whether on a government to government basis or at the private sector levels.

• The global Islamic banking sector is growing at an average of 15%-20% per annum.

• Currently, there are 300 Islamic financial institutions operating in about 100 countries worldwide; with more than 300 Islamic equity funds managing assets in excess of USD5 billion.

Source: Bursa Malaysia/LFX Islamic Capital / Market Report

Modern Day Industry Facts & Figures

7

• Total assets of the Islamic banking sector now stands at USD750 billion and will reach USD1 trillion by 2010. (McKinsey)

• Size of Islamic mutual funds assets are estimated at USD800 billion. Where USD50-70 billion are in actively managed products. (Eurekahedge, Key Trends in Islamic Funds, 2006)

• Global sukuk market (USD plus RM issuance) is now over USD92 billion. USD issuance of sukuk amounts to USD 22.85 billion as at end 2007.

• Global market capitalization of Dow Jones Islamic Index > USD10 trillion.

• Private capital investments, especially among Middle East’s high net worth individuals whom are predominantly Muslim, is estimated to reach USD1.5 trillion and reaching USD2 trillion by 2010.

• Islamic finance is recognized as having growth potential in established conventional financial centers. The market is expected to grow to USD 3-4 trillion in the next 4-5 years.

Source: Malaysia International Islamic Financial Centre, October 2006 Report

Modern Day Industry Facts & Figures (continued)

8

The Shape of the Modern Industry

9

The Modern Islamic Financial Market

Islamic Islamic

Financial Financial

MarketMarket

Wealth Wealth

ManagementManagement

BankingBanking

Non-Financial Non-Financial

Institutions Institutions

ServicesServicesMoney MarketMoney Market

Capital Market Capital Market

Debt and EquityDebt and Equity

Asset Asset

ManagementManagementTakafulTakaful

Structured Structured

Products and Products and

DerivativesDerivatives

Industry must be comprehensive with all critical components established

10

Global Development of the Islamic Capital Market in the Last 30 Years

Area

1970s 1980s 1990s 2000sEvolution

Institutions

Products

•Gulf / Middle East

•Commercial Islamic banks

•Commercial banking products

•Gulf / Middle East•Asia Pacific

•Commercial Islamic banks•Takaful•Islamic investment companies

•Commercial banking products•Takaful products

•Gulf / Middle East•Asia Pacific

•Commercial Islamic banks•Takaful•Islamic investment companies•Asset management companies•Brokers/Dealers

•Commercial banking products•Takaful products•Mutual funds/ unit trust•Domestic Islamic bonds•Shariah compliant stocks•Islamic stock broking•Islamic derivatives

•Gulf / Middle East•Asia Pacific •Europe / Americas•Global Offshore Market

•Commercial Islamic banks•Takaful•Islamic investment companies•Asset management companies•Brokers/dealers•Islamic investment banks•E-Commerce

•Commercial banking products•Takaful products•Mutual funds/ unit trust•Domestic Islamic bonds•Global Islamic bonds•Islamic asset backed securities•Shariah compliant stocks•Islamic stock broking•Islamic derivatives•Hedge funds•Private Equity & Islamic REITs

(Source: Report of the Islamic Capital Market Task Force of the International Organization of Securities Commission (“IOSCO”) and CIMB Islamic Analysis)

11

Strategic Landscape For International Growth

EUROPE

LUXEMBOURG

UK

SWITZERLAND

DENMARK

ALBANIA

GERMANY

TURKEY

RUSSIA

AFRICA

TUNISIA

SENEGAL

SUDAN

EGYPT GHANA

ALGERIA

SOUTH AFRICA

GAMBIA

ASIA

KUWAIT

PHILIPPINES

BRUNEI

SINGAPORE

MALAYSIA

INDONESIA

IRAN

JORDAN

QATAR

PAKISTAN

BANGLADESH

SAUDI ARABIA

UAE

BAHRAIN

INDIA

THAILAND

IRAQ

NIGERIA

AUSTRALIA

US

SRILANKA

OMAN

TAKAFUL ONLYISLAMIC BANK ONLYISLAMIC BANK & TAKAFUL

LEBANON

TRINIDAD & TOBAGO

AMERICAS

OCEANIA

EUROPE

LUXEMBOURG

UK

SWITZERLAND

DENMARK

ALBANIA

GERMANY

TURKEY

RUSSIA

AFRICA

TUNISIA

SENEGAL

SUDAN

EGYPT GHANA

ALGERIA

SOUTH AFRICA

GAMBIA

ASIA

KUWAIT

PHILIPPINES

BRUNEI

SINGAPORE

MALAYSIA

INDONESIA

IRAN

JORDAN

QATAR

PAKISTAN

BANGLADESH

SAUDI ARABIA

UAE

BAHRAIN

INDIA

THAILAND

IRAQ

NIGERIA

AUSTRALIA

US

SRILANKA

OMAN

TAKAFUL ONLYISLAMIC BANK ONLYISLAMIC BANK & TAKAFUL

LEBANON

TRINIDAD & TOBAGO

AMERICAS

OCEANIA

COMPREHEMSIVE ISLAMIC FINANCIAL MARKET - MONEY MARKET, DEBT & EQUITY CAPITAL MARKET, FUNDS, ETC

Geographical spread of countries that offer Islamic Banking and Takaful products and services

12

Islamic Wealth Management

13

What is Islamic Wealth Management ? – The WM Cycle

Source: CIMB PB

Wealth Creation

Wealth Enhancement

Wealth Protection

Wealth Distribution

From business, savings in bank, investment in first property, etc.

Enhancing total returns from capital gains and income, including via use of leverage

Capital preservations, risk management, insurance, trusts

Passing on assets through wills and trusts

• Islamic Wealth Management is concerned with providing end-to-end solutions using products and services throughout the wealth management cycle in compliance with Shariah. It’s a Shariah-based service.

14

What does it take to have a good Islamic Wealth Management Hub

To become the focal point for Islamic Wealth Management an Islamic Finance centre would

• Have developed to a level where demand for management of assets in

accordance to the rules of Shariah has grown beyond fulfilling basic

safekeeping to generating productive returns

• Have a track record of market leadership and product innovation

• Have a supportive regulatory and legal framework

How does Malaysia measure up against these criteria?

15

• Industry players of reasonable size and economies of scale undertaking multitude of Islamic financial activities.

• Availability of products for multiple customer segments.

Diversified PlayersIslamic Banks

Investment BanksTakaful companies

Development Financial Institutions

Fund Management companiesStockbroking companies

Widest Product RangeIn terms of products and

services, there are more than 100 Islamic financial products and services ranging from deposit, financing, treasury/money market investment, trade financing, card services and banking services offered by the financial institutions

Diversified products and players

16

• Introduction and amendment of key legislation has been a key contributor to development of Islamic banking and the sukuk.

• Malaysia has the most comprehensive regulatory framework for Islamic Finance and includes….

• Shariah is regulated by the central bank. Industry as a whole is 100% Shariah compliant not just on product basis.

Banking Laws (eg. Islamic Banking Act 1983 (“IBA”))

Securities Laws (eg. Guidelines on the Offering of Islamic Securities 2004 (“IS”))

Shariah requirements (incorporated in IBA and IS) + Guidelines on Shariah Committee Management

Key Governing Laws Land laws Securities laws i.e. merger/takeover,

beneficial ownership Lease laws (Ijara transaction) Tax/Stamp duty legislation Company law Others

“Accidental” Governing Laws

Proper and effective regulatory framework

17

Malaysia Has The Most Comprehensive Regulatory Framework for Islamic Finance and includes the following…

Enactment of Islamic Banking Act 1983

Enactment of Government Investment Act 1983

Enactment of Takaful Act 1984

Amendments to Banking and Financial Institutions Act 1989

Enactment of Labuan Offshore Laws 1990

Guidelines on the Offering of Islamic Securities 2004

Guidelines on the Management of Shariah Committees

Guidelines for Islamic Real Estate Investment Trusts 2005

Guidelines on Islamic Fund Management 2007

Amendments and revisions on the relevant regulatory framework continuously being made to cater the ongoing developments of Islamic financial market

18

Why Islamic Wealth Management?

19

The Obligation

The Quran : on the Prohibition of Riba’ or usury

Al-Baqarah Verse 275

“...Allah has permitted trades and prohibited riba’/usury...”

Al-Baqarah Verses 278 - 279

“O you who believe! Fear Allah and give up what remains of your

demand of usury, if you are indeed the believers. If you do not do it,

take notice of War from Allah and His Messenger: but if you turn back,

you shall have the capital sums; deal not unjustly, and you shall not

be dealt with unjustly.”

O ye who believe! Devour not usury, doubling and quadrupling (the sum lent). Observe your duty to Allah that you may be successful. (Qur’an, 3:130)

20

The Obligation

“Shariah defines five necessities as necessary and basic for human existence. It is the duty of every society to preserve and protect the five necessities; other wise human life would be harsh, brutal, poor and miserable here and in the hereafter”. (Islamic Divine Law (Shariah), The Objectives of The Islamic Divine Law – Mashhad Al Allaf)

The five necessities are

• Religion (Deen),

• Life (Nafs)

• Intellect (Aqal)

• Progeny (Nasal)

• Property (Maal)

Hence the need to manage wealth in accordance to Shariah.

21

The Market Trend - Latent Demand in Malaysia

• There are increasing numbers of discerning Muslims more concerned with how their monies are spent & kept. An indicator is the trend of zakat (tithe payment.

• Zakat collections between 1996 and 2005 have been growing at a CAGR of 15% p.a.

• By end 2006 it is estimated that zakat collections reached some RM600 million

• Zakat on personal income and zakat on savings represents some 71% of zakat collected; approximately 50% of zakat collected is by way salary deduction.

0

100

200

300

400

500

600

700

Millions

1996 1998 2000 2002 2004 2006f

Year

Zakat Collection in Malaysia

Source PPZ and CIMB Islamic

22

The Market Trend – Growing Islamic Banking An Indicator of Growing Wealth• Islamic banking has been a key contributor to growth in the financial markets

• It is estimated that at end 2007, USD34 billion assets are held in Islamic banking representing 13% of total financial assets. (BNM)

• The bulk of deposits is predominantly in investment and savings type whereas financing is mainly disbursed for purposes of home and auto purchases a clear indicator that affluence of Islamic banking population is growing.

• Islamic banking Approximately 70% of Islamic banking customers are non-Muslims.

Islamic Banking Statistics (RM ' BIL)

120.9998.58

76.84

47.0159.35 68.07 82.22

94.99111.82 117.45

35.9247.11 53.18 60.21

72.8683.87 86.22

20.82 28.3236.72

48.62 57.8467.36 69.82

020406080

100120140

2000 2001 2002 2003 2004 2005 2006 2007

Year

Total Asset Total Deposit Total Financing

23

Market trend - The Need for Planning.

Estate planning is becoming increasingly important to address generational wealth transfer.

In Malaysia as at July 2006 there is an estimated RM38 billion worth of inheritance assets that have failed to be distributed due to improper estate planning. A vast proportion of this has been classed as assets belonging to Muslims.

Thus, there is a need for proper planning to administer one’s assets.

In Islam, the virtues of planning are revealed in Verse 47 of Surah Yusuf

• “For seven consecutive years, you shall sow as usual and that (the

harvest) which you reap you shall leave in ears, (all)-except a little of

which you may eat.”

24

Malaysia as an Islamic Wealth Management Hub

25(Source: Bursa Malaysia, Securities Commission)* 2007 figures Number of Companies as at Nov 07, Market Cap as at end Dec 07

By Nov 2007, 86% of Bursa Malaysia comprises of shariah compliant stocks

Market capitalisation of shariah compliant stocks accounted for RM705.05 billion or 63.74% of total domestic market capitalisation as at December 2007

Compared to the developing GCC & MENA stock markets, Bursa Malaysia provides more choice in terms of sectoral opportunities thereby providing better risk diversification

Top 10 Companies % of Total Market Capitalization

China

UK

US

Malaysia

Bahrain

UAE

Saudi

0% 20% 40% 60% 80% 100%(Source: Bursa Malaysia, E&Y Islamic Funds and Investment Report 2007)

544585

636677 699

778

855886

853

0

100

200

300

400

500

600

700

800

900

1000

1999 2000 2001 2002 2003 2004 2005 2006 2007*

0

100

200

300

400

500

600

700

800

Bill

ion

s

Total Listed Companies Market Valuation

Size of Malaysia’s Equity Market

Malaysia: A Global Islamic Capital Market

26

(Source: The Islamic Capital Market Task Force (IOSCO) Report, ISI Emerging Markets, Bloomberg)

Malaysia 90%

Qatar3%

Indonesia0%

Others1%

Saudi Arabia2%

Bahrain4%

As at December 2003 As at December 2007

UAE8.54%Caymans

7.67%

Jersey5.97%Others

3.84%

Saudi Arabia8.18%

Malaysia 65.80%

•As of December 2007, approximately 66% of new Islamic fixed income securities globally were issued in Malaysia. The remaining global issues are from the Middle East / GCC and offshore jurisdictions.

•Recent experience has shown that products with more global features attract more investment from abroad vis USD denominated sukuks

Malaysia: A Global Islamic Capital Market

27

95

105

115

125

135

145

155

Sep-0

3

Dec-0

3

Mar-

04

Jun-0

4

Sep-0

4

Dec-0

4

Mar-

05

Jun-0

5

Sep-0

5

Dec-0

5

Mar-

06

Jun-0

6

Sep-0

6

Islamic Conventional

Ringgit Bonds with maturities of 1-year and above

95

105

115

125

135

145

155

Sep-0

3

Dec-0

3

Mar-

04

Jun-0

4

Sep-0

4

Dec-0

4

Mar-

05

Jun-0

5

Sep-0

5

Dec-0

5

Mar-

06

Jun-0

6

Sep-0

6

Islamic Conventional

Ringgit Bonds with maturities of 5-years and above

Index reading Av. Annualized Returns Average Duration

Islamic Conventional Islamic Conventional Islamic Conventional

1-year and above 145.47 138.35 7.64% 6.27% 4.73 3.98

5-years and above 142.07 125.43 7.57% 4.39% 6.32 6.11(Source: CIMB Fixed Income Research)

Islamic Papers have always Outperformed Conventional Papers in Malaysia

28

Leading in Islamic Asset Management

No. of Shariah Funds vs Conventional Funds

55 71 83 100 134171

229 257316

387

0

100

200

300

400

500

600

2003 2004 2005 2006 2007

Year

No

. of

Fu

nd

s

Shariah-based Conventional

Shariah-based Unit Trust Funds

16.90

4.756.76

8.49

9.177.5

9.988.67.76.8

02468

1012141618

2003 2004 2005 2006 2007

Year

NA

V (

RM

bil

lio

n)

0

2

4

6

8

10

12

(%)

NAV % to Total Industry

Malaysia has some 134 funds at the end of 2007 and is estimated to account for 22% of Islamic funds worldwide (Securities Commission, Eurekahedge)

Fund assets have been growing at a CAGR of 38% per annum between 1997 and 2007.

The total NAV of Islamic unit trusts in Malaysia by end 2007 stood at some USD5.12 billion or 9.97% of total outstanding unit trusts net asset value (Securities Commission)

29

Growing Potential of TakafulTakaful sector has been growing at an average of 17% p.a. since 2001 and by end 2007 total contributions were estimated at USD931 million. (BNM, Islamic Finance News)

Growth of takaful is driven by demand for mortgage, motor, medical and education plans.In the same period total assets of Takaful are estimated to amount to USD1.7 billion.

403

492.5

553.8

717.2

0 500 1000 1500 2000 2500

2003

2004

2005

2006

Yea

r

Millions

Family Takaful Assets General Takaful Assets

Total Takaful Contributions 2003-2006

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2001 2002 2003 2004 2005 2006T

ho

usa

nd

s

IL

Annuity

Group

Indvdl

Breakdown of Family Takaful Contributions2001-2006

30

Future prospects for Takaful

As at end 2006 Takaful penetration in Malaysia is estimated to be 6.3%.

Family takaful penetration relative to general takaful penetration is higher, indicating that future takaful growth will be driven by demand for more products from family takaful segment.

Malaysia’s has a relatively broader distribution infrastructure for Takaful compared to other regions (direct agents, direct mail, bancassurance). This is expected to be one of the key contributors to deepen the Takaful market.

Country 2005 Premiums (USD) Relative Penetration

GDP per capita USDTotal Life Non Life

World 518.5 299.5 219.0 137% 6,893Malaysia overall 283.3 188 95.3 197% 5,216

Malaysia Takaful 13.2 9.7 3.5 273%

Source Malaysian S&P, Islamic Finance News, Swiss RE Sigma Report, BNM

31

Other recent product innovations

There is increased depth in products and services

• Shariah compliant REITS have been listed on Bursa since 2005. REITS offer more diversification opportunities in addition to regular income streams. Despite higher relative withholding tax, there is growing interest from GCC investors in infrastructure projects slated (eg IDR) and their potential for providing long term stable income as REITS

• Regulated Short Selling reintroduced in Jan 2007 brings Bursa closer to developed market standards by giving investors opportunities to make profit despite bearish market conditions

• FTSE Bursa Indices enhance the attractiveness of Malaysia as key destination for global Islamic fund flows by providing investors internationally accepted performance benchmarks

• Exchange Traded Funds – Asia’s First Shariah compliant ETF was launched Jan 2008 with a public spread oversubscribed by 22.5 times. This development adds to the growing list of liquid investment options available to investors

• Islamic derivatives – Futures Crude Palm Oil (FCPO) and Single Stock Futures

32

Increasing Professional Capabilities in Malaysia

• Financial Planning/ investment advisory services continue to experience healthy

growth driven by increasingly complex products and growing client sophistication

• As at end 2006 there are some 11,500 memberships registered with major

financial planning bodies representing a growth of some 14% in the last 2 years*

• Financial institutions are increasingly placing strong emphasis on WM divisions as

a client retention strategy as well as a means to grow revenues

• In line with general move to increase professionalism of advisory services training

programs that are Islamic finance focused have emerged

• 2006 - INCEIF established to support the need to develop Islamic finance talent

• 2007- Islamic Financial Planner developed jointly by FPAM & IBFIM

*Source FPAM, MFPC, MChFC

33

Opportunities and Issues of Islamic Wealth Management

34

Drivers for Islamic Wealth Management Growth

•The sustained rise in price of petrol is expected to continue to drive growth for development of Islamic finance products as investors, for example from the the Middle East, seek appropriate avenues for diversifying economic, business and financial holdings

•Whilst major investments are likely to be driven by sovereign wealth funds and government investment corporations another key segment looking for investment opportunities are high net worth individuals

•With its diversity of Islamic finance products and experienced players Islamic capital markets such as Malaysia, are expected to be at the forefront of capturing the anticipated net capital outflows of oil producing nations

•Supported by a facilitative and comprehensive regulatory framework Islamic finance has come to the stage where development in wealth management services will drive future growth

35

• The numbers of HNWI expected to increase supported by economic expansion of Asia Pacific and MENA (Middle-East-North-Africa) regions

• Some USD1.5 trillion of Gulf Corporative Countries (GCC) funds are held in assets worldwide vested in treasuries, corporate bonds, equities and funds. The GCC region accounts for 3.2% of the global high net worth population. (S&P, Islamic Finance News, Cap Gemini)

Opportunities: Wealth Worldwide

1996 2006 2011# of HNWI’s

(Financial Assets > $1 million)

4.5 million 9.5 million

Estimate of HNWI Wealth

$16.6 trillion $37.2 trillion $51.6 trillion

# of Ultra HNWI’s

(Financial Assets >$30 million)

95,000

1% of HNWI population

1/3 of HNWI wealth

Source: World Wealth Report 2007, Cap Gemini

36

Opportunities: Global Product Acceptance

Malaysia is known for coming out with innovative products.

Shariah harmonisation has helped to improve marketability of products in markets beyond Malaysia

• Alternative Sukuk structures using globally accepted Islamic principles have consistently been oversubscribed

• Shariah compliant structured products structured in Malaysia have been successfully offered regionally viz Brunei, Singapore & Indonesia

• Domestic Shariah compliant unit trusts that choose to list cross border on DIFC need only provide Shariah disclosure

Harmonisation is not Standardisation. Differences of opinions are well celebrated in Islam and could contribute towards developing creative and innovative products.

37

Issues: Experienced Islamic Finance Professionals Must Grow Faster

The provision of sound advice requires experience. Analysis must take into account both personal and business needs looking at financial and non financial products. To be a trusted advisor, he or she should be well rounded.

Recognizing that a wide skill-set is required for a robust industry. Other jurisdiction has established key learning framework that is backed by global industry players for fast tracking the development of wealth management services.

Similar or better approach must be undertaken in Malaysia specifically for developing Wealth Management skills.

38

Issues: Limited Product Developments in Islamic Estate Planning

• Islamic products for wealth distribution are largely undeveloped. The limited offerings available are based on basic fiqh concepts that are accepted under existing civil laws

• Conventional products are comparatively more developed and have greater variety. For instance the concept of trust can be applied to various purposes such as living trusts, family trusts, education trusts, unit trusts etc.

• A conventional trust deed does not confine the assets settled to be shariah compliant. There is a need for a specific document that functions as a trust but is Shariah compliant

• Islamic Trust Deed or Amanah Deed may provide a solution. Such an Amanah deed would ensure that the assets are settled and managed in accordance Shariah

• Current practice requires an individual to hibah their assets prior to establishing a trust. Without doing so trusts created may fail as any assets not willed or given in hibah would form part of the estate to be distributed according to fara’id.

39

Issues: Developing concepts into Viable Products

More research must be made to develop fiqh concepts into credible products that are endorsed by the industry.

An example is the concept of Waqf i.e. properties (fixed or moveable) settled for the benefit of Waqf beneficiaries.

Currently waqf falls under the purview of state religious authorities, waqf is one of the largely untapped potential in wealth distribution

• Opportunities exist to

• Develop idle Waqf lands to maximise revenues to beneficiaries

• Enhance the attractiveness of Waqf assets as Islamic financial instruments

• Utilise Waqf as potential product concept for wide arrays of applications

40

Issues: Lost Opportunities

Local financial institutions may only offer products developed in Malaysia or approved by regulators therefore limiting the creation of an attractive portfolio that takes advantage of market timing in global markets.

HNWI’s are generally highly seasoned investors and domestic service providers should be able to offer a product suite comparable to that of an offshore bank.

Locally registered financial institutions have attained the competency level of offering global products and are better placed to advise domestic HNWI on their portfolio.

However under the MIFC agenda Islamic banks have the opportunity to conduct international currency business in Malaysia and offshore product offering is possible.

41

Moving Forward : “Malaysia As An International Islamic Financial Hub”

• MIFC - nationwide initiative to promote Malaysia as an International Islamic

Financial Centre.

• MIFC aims at fortifying Malaysia’s position as a vibrant, innovative and competitive

International Islamic financial hub.

• Vision in conjunction with MIFC - to strategise to promote Malaysia as a global

reference centre for Shariah views on Islamic banking and finance, banking

on our unique culture and long history of Shariah tolerance.

• By promoting genuine Shariah tolerance, Malaysia can aspire to become the

cosmopolitan Shariah reference centre where varied Fiqh views can be discoursed

and put into practice.

• Global players would assemble here for latitude in creation and innovation, in

search of new ideas for their financial products.

42

Moving Forward

• The results of regulatory liberalization since 2005 and progressive Shariah research are beginning to take effect with more sophisticated products and services such as shariah compliant structured products, real estate investment funds have been available to retail clients.

• Whilst wealth managers are able to address the issues of wealth enhancement, protection and distribution, existing services need to be further developed to allow for more customization and opportunity for returns enhancement in all economic and investment cycle

• Leveraging on the strengths of its comprehensive domestic infrastructure, active market making and products innovation Malaysia’s Islamic capital market is poised to develop into a key centre for international Islamic funds to reside. However regional competition is expected.

• Islamic banks such as Faisal Bank and CIMB have establishment of Islamic Private Banking services in view of the potential growth of Islamic wealth management.

43

Contact Details

Please direct all queries to:Mohd Willieuddin LimDirector, Global MarketsCIMB Islamic Bank Berhad1st Floor, Menara Promet, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia. Tel: +603 2116 1270, Fax: +603 2144 8509Email: willieuddin.lim@cimb.com.

New York

London

Brunei Darussalam

Hong Kong

Jakarta

Kuala LumpurSingapore

Bangkok

Bahrain

Tokyo

Yangon

• Emphasis on knowledge products for private clients and institutions;

• Leveraging regional product expertise;

• Understanding of local requirements;

• Capable banking infrastructure to execute transaction;

• Comprehensive banking franchise;

• A top provider of tailor-made financial solutions to clients across the region;

• Kuala Lumpur is the leading Islamic financial centre.

44

Important Notice

This document and its contents are proprietary information and products of CIMB and may not be reproduced or otherwise disseminated in whole or in part without its written consent.

The information in this presentation reflects prevailing conditions and our views as of this date. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Although the information contained herein is believed to be reliable, CIMB makes no representation as to the accuracy or completeness of any information contained herein or otherwise provided. Nothing contained in this presentation is, or shall be, relied upon as a promise or representation as to the future.