Diversification of Islamic Financial Instruments
160
Table 72: Islamic Real Estate Investment Trusts (REITs) in Malaysia
2016 2015120
Islamic REIT 4 4
Total industry 17 17
Market capitalization of Islamic REIT (RM billion) 18.53 16.11
Market capitalization of total industry (RM billion) 44.19 37.48
%market capitalization of Islamic REIT to total
industry
41.93 42.98
Source: Created by Author
Sukuk
Malaysia is pioneer in Islamic finance, particularly Islamic capital markets. It has contributed
to spur the growth of Islamic capital market not only at national level but also at international
level. This is due to the efforts of Malaysia International Islamic Financial Center which plays a
crucial role in the regulation and development of Islamic capital market which helps in rapid
growth of the Islamic capital market. This is also due to its Shariah compliant products and
services collecting from equities, unit trusts, exchange traded funds, structured products,
derivatives, fund management and stocks broking services that have increased in depth and
breadth of the instruments of Islamic capital market in Malaysia. Currently, this contribution of
Malaysia to Islamic capital market has been recognized by global financial market. This is
because Malaysia’s Islamic capital market instruments and derivatives have potential area of a
high growth due to Bursa Malaysia’s innovation for Islamic capital market products to meet
the demand of investors and need of the markets. (Bursa Malaysia, 2008).
In addition to this, Malaysia has pioneered in Islamic capital market for the following reasons:
 Malaysia is the first Muslim country which established the first Islamic unit trust in
1993 which is called Arab Malaysian Ittikal
 Malaysia is the first Muslim country which has a full-fledged of Islamic stock broking
company which was established in 1994 and called BIMB Securities Sdn Bhd
 Malaysia is the first Muslim country which has its own full fledge department of
Securities Commission which was established in 1995 to regulate and monitor the
activities of Islamic capital market by forming special Shariah Advisory Council (SAC)
in 1996 to guide the market players to invest their securities in accordance with the
principles of Islamic law.
 Malaysia is an international hub for Islamic capital market; thus, its Minister of finance
has launched in 2001 the Capital Market Master Plan with 13 recommendations which
were formulated to make Malaysia the center of Islamic capital market activities.
 Malaysia is the first Muslim country which introduced in 2001 the first global
corporate Sukuk which brought a paradigm change in the international Islamic
financial market.
120 Ibid