Islamic Fund Management
70
Matured Developing
(Advanced)
Developing
(Intermediate)
Infancy
Malaysia Pakistan South Africa Morocco
Transparency of
transaction costs:
- All-in cost in terms of
legal, pricing, issuance
timeline
Capacity/Talent
development:
-Experts in Islamic
finance and Islamic fund
management industry
Sources: RAM, ISRA
Further details on the development-stage matrix are provided in Table 4.2. The ‘developing’
category is further segregated into i) advanced; ii) intermediate; and iii) beginner to
differentiate the level of market development in each country.
Table 4.2: Description of the Development-Stage Matrix
Country Stage of
Development
Rationale
Malaysia Matured Malaysia’s Islamic finance industry is among the world’s
most advanced. Its level of maturity supports the sturdy
performance of its ICM, including Islamic funds. This is
reflected by the Malaysian ICM’s share of the overall capital
markets (2017: 59%). The country’s strong GDP per capita
of USD9,944.9 in 2017 further highlights its healthy
economic growth.7 The adoption of a two-tier quantitative
Shariah screening approach has boosted the
competitiveness of its Islamic fund management industry.
Pakistan Developing
(Advanced)
According to the Islamic Finance Development Indicator
(IFDI) 2017 Rank, Pakistan is among the top five performers
in Islamic finance. Its GDP per capita stood at USD1,547.9 in
2017. Out of the 559 companies listed on the Pakistan Stock
Exchange (PSX), 250 were Shariah-compliant as at end-
March 2018. In March 2018, Pakistan issued a draft Shariah
Governance Regulation 2018, which will further strengthen
its existing Shariah screening methodology. This supports
its categorisation as a ‘developing (advanced)’ market.
South
Africa
Developing
(Intermediate)
South Africa’s Islamic fund management industry is slowly
emerging, coming in at eighth position with a 2.4% share of
global Islamic funds as at end-2017. The lack of a
harmonised approach to Shariah screening and the absence
of a healthy sukuk pipeline are among the challenges
hampering its current performance. Based on the latest data
from JSE, there are now 160 Shariah-compliant companies
out of 400. The GDP per capita of South Africa stood at
7 The figure of GDP per capita for each country is extracted from The World Bank Data on 28 August 2018, available at