Published November 21, 2008

Reliance launching Islamic funds in Malaysia

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(MUMBAI) India's Reliance Capital Ltd will launch Islamic funds in Malaysia in about eight months following an approval it got to set up an asset management company in the South-east Asian country, a top official said.

The move by Reliance is part of its plan to expand overseas.

Islamic investing forbids Muslims from receiving interest payments and taking a bet on companies involved in the production or sale of pork, alcohol, tobacco, pornography, gambling and non-Islamic structured finance or life insurance.

Nearly 180 Islamic mutual funds registered for sale in Malaysia and tracked by global fund intelligence firm Lipper managed about US$5 billion at the end of last month.

Demand for Islamic assets is rising in Malaysia, thanks largely to government efforts to grow the industry. Islamic assets account for 16 per cent of Malaysia's total banking assets, according to official figures.

'We have got the approval to incorporate the AMC business,' Vikrant Gugnani, chief executive of Reliance Capital's Indian mutual fund unit, said yesterday.



Malaysia had earlier handed out Islamic fund management licences to Kuwait Finance House and DBS Asset Management, a subsidiary of Singapore's DBS Group. CIMB-Principal Islamic Asset Management, a joint venture between Malaysian lender CIMB Group and US firm Principal Financial Group has also received approval. -- Reuters