Update COVID-19 in Indonesia: 3,372,374 confirmed infections, 92,311 deaths (30 July 2021)
30 July 2021 (closed)
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The stock exchanges of Indonesia and Malaysia agreed to join hands to develop a World Sharia Stock Market Center. Both sides signed a memorandum of understanding (MoU) on Tuesday (02/08) at the 12th World Islamic Economic Forum (WIEF) in Jakarta. Both exchanges - the Indonesia Stock Exchange (IDX) and the Bursa Malaysia - are eager to establish a global benchmark for Islamic capital markets. This is part of an effort to broaden the usage and availability of Islamic liquidity and products worldwide.
Tito Sulistio, President Director of the IDX, stated that both Southeast Asian nations should combine their strengths in order to become the globe's center for Islamic financial markets. Currently, such a global center for financial sharia products does not exist. Both nations contain a Muslim-majority population; Indonesia in fact has the world's largest Muslim population, while Malaysia has the world's largest sharia market share. This puts both countries in a position to become global leaders for future sharia portfolio instruments.
After the signing of the MoU at the 12th World Islamic Economic Forum (WIEF) in Jakarta, both exchanges will conduct studies and develop the necessary infrastructure. After six months we should see the launch of sharia bonds, financial securities products and other sharia-compliant products. The planned World Sharia Stock Market Center will also serve as a research and development hub to develop micro market structure for the global sharia stock market.
Global Islamic finance assets have been growing rapidly over the past 15 years, outperforming conventional banking. However, Islamic banking remains mainly concentrated in the Middle East (particularly Iran and Saudi Arabia) and Malaysia. There is plenty room for further growth as the market is huge (there are some 1.7 billion Muslims around the globe) and the sector is still largely undeveloped. Moreover, the world's Muslim population is young. Pew Research Center says the median age of the world's Muslim population is 23 years, younger than all other religious groups (the median age for non-Muslims is estimated at 30 years).
According to the State of the Global Islamic Economy 2015 report, the combined value of all Islamic markets' assets around the world is estimated at USD $1.81 trillion in 2014. About USD $295 billion of that total amount constitutes the outstanding value of sukuk (Islamic bonds) that show an average growth pace of six percent per year. Meanwhile, the value of global Islamic financial market assets is projected to grow to USD $3.24 trillion by 2020.
Berhad Tajuddin Bin Atan, Chief Executive Officer at Bursa Malaysia, said he is proud to be working together with Indonesia, Malaysia's seventh-largest trading partner, and sees great potential due to the countries' huge Muslim population.