Malaysia's Islamic banks could get a greater role in managing sukuk by penetrating distribution channels to investors in Southeast Asia.
Thus, Malaysia's Central Bank Governor Zeti Akhtar Aziz, is encouraging Malaysian Islamic banks to expand further in Southeast Asia.
"We encourage Islamic banks to venture out and participate, they need to enter into strategic partnerships with other (regional banks)," Zeti told a media roundtable at the Global Islamic Finance Forum in Kuala Lumpur.
"They need the distribution channel to investors in Asia, where the surplus funds (for sukuk) are."
According to Zeti, international banks may have an advantage due to their presence throughout the world.
Some 12 percent of Turkey's recent $1.5 billion sovereign sukuk was taken up by Asian investors. Asians comprised the second-largest group of investors for the sukuk, after the Middle East.
Zeti said that Malaysian banks could expand in the region through mergers and acquisitions.
Malaysia's two biggest banks boast a strong regional presence, but their earnings remain anchored in their home market.
Maybank Islamic, the Islamic carm of Malayan Banking Bhd , is the largest Islamic bank in Asia with a presence in Malaysia, Singapore, Indonesia, Hong Kong and the Philippines. CIMB Islamic, the Islamic arm of CIMB, derives around 10 percent of its earnings from business in Indonesia, Singapore and Brunei.
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