KUALA LUMPUR, June 17 RHB Asset Management, the
investment arm of Malaysia's fourth largest bank RHB Capital
, plans to launch a series of Islamic funds across Asia
in the next year to take advantage of growing interest in
Malaysia's fund managers have long been domestically focused
but are being encouraged to build a wider footprint under the
country's strategy to internationalise its capital markets.
RHB, which had $13.96 billion in assets under management as
of April, aims to source a third of assets from overseas by 2018
against 12 percent today, said Ho Seng Yee, chief executive of
retail distribution at RHB Asset Management.
Its latest Islamic fund, launched in Hong Kong on Tuesday,
is part of this push, with more launches in the pipeline.
"We would like to launch two more Islamic funds in the Hong
Kong market next year. Similarly we are planning to have Islamic
funds launched in Singapore and Indonesia," Ho said in an
interview. "It will not be later than the first quarter of next
Islamic fund managers screen their portfolios according to
religious guidelines such as bans on tobacco, alcohol and
gambling, in much the same way as socially responsible funds. So
RHB hopes its sharia-compliant funds will attract some
non-Muslim as well as Muslim investors.
RHB's latest fund, its 17th Islamic fund overall, will
invest in both equities and sukuk (Islamic bonds), and is
expected to grow to as much as $80 million in the next 12
The fund's mandate will allow it to buy into Hong Kong's
planned debut sukuk issue, which is expected to help raise
awareness of the industry among Hong Kong investors. The Hong
Kong government plans to issue between US$500 million and $1
billion worth of Islamic bonds "after the summer holidays", a
spokesperson for its central bank told Reuters earlier this
"Hong Kong investors are not familiar with Islamic funds and
there are challenges, that's why we have planned and committed
to do a lot of education," said Ho.
Malaysia is one of the largest markets for Islamic funds and
more asset managers are gradually joining it. Last October,
Malaysia's Malayan Banking, the country's largest
lender, launched an Islamic asset management unit, while
Britain's Threadneedle Investments set up in Malaysia a month
earlier with plans to launch Islamic funds.
Malaysia had 19 Islamic fund managers with a combined 97.5
billion ringgit ($30.3 billion) in assets under management at
the end of 2013, data from the Securities Commission showed.
($1 = 3.2170 Malaysian ringgit)
(Reporting by Al-Zaquan Amer Hamzah and Bernardo Vizcaino;
Editing by Andrew Torchia)