Prudential eyes Dubai sharia funds, Indonesia licence
KUALA LUMPUR, Oct 26 (Reuters) - British insurer Prudential (PRU.L) plans to launch two Islamic equity funds in Dubai in the coming months and apply for an asset management licence in Indonesia, an official said on Monday.
Demand for sharia funds would be strong once Dubai bounces back from an economic slowdown, said Mark Toh, Prudential Corp Asia's regional Islamic fund management head.
"If Muslims have a choice, they would invest in (Islamic funds), previously there were none," Toh said on the sidelines of a fund launch. "There are very little of such products available not just for Malaysia, but for the global market as well."
Growth of the Islamic fund industry has been hampered by a limited product range and distribution channels.
There were about 750 Islamic mutual funds with combined assets below $50 billion as of the first quarter of 2009, a fraction of the world's mainstrean asset management industry. Only 14 funds are larger than $500 million each, according Ernst & Young, an accounting firm.
Prudential is the second largest multinational Islamic asset manager, managing about $400 million.
Toh said Prudential would apply for an Indonesian Islamic asset management licence after the authorities release new guidelines at the end of the year. He said demand for Islamic funds in Indonesia would be driven by its Muslim population and growing awareness of sharia principles.
Because of a government push, Indonesia is seen as the next growth story for the $1 trillion industry.
The authorities have agreed to revise value added tax laws to remove double taxation on Islamic transactions, a move expected to prompt a flood of Islamic bond issuance and the establishment of more sharia banking subsidiaries.
(Click on [ID:nISLAMIC] for more Islamic finance stories and ISLAMIC for a speed guide) (Reporting by Liau Y-Sing; Editing by Jan Dahinten) ((y-sing.liau@thomsonreuters.com; Reuters Messaging: y-sing.liau.reuters.com@reuters.net; +603 2333 8083)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
