The Asian country plans to become a bigger player in the field of Shariah-based wealth management.

Malaysia intends to push forward as a centre for Islamic fund and wealth management, setting out a blueprint for action this year, as the country seeks to expand a capital market worth a total of RM2.82 trillion.

The blueprint - as yet undefined - is to be set out by the Securities Commission Malaysia, it said yesterday, as it unveiled a report on developments during 2015.

The strategies are expected to reinforce the sustainability of the industry and will include, among others factors, strengthening global capabilities of market intermediaries, expanding international connectivity and seizing new market opportunities.

The Asian country accounts for more than half (54.3 per cent) of all outstanding sukuk issuance around the world (source: SCM). Sukuk is a form of loan instrument that complies with Shariah law by not charging interest. The size of the Islamic capital market grew 6.7 per cent year-on-year to RM1.70 trillion in 2015. The market capitalisation of Shariah-compliant securities reached RM1.09 trillion in 2015, representing 64.1 per cent of the total market capitalisation.

With some Muslim countries enjoying rising prosperity in recent years, driven by oil revenues and other sources, and with the attendant growth of an affluent middle class, so demand for Shariah-compliant products in such countries has grown. The market remains relatively small compared with the conventional capital markets, however. In recent times, one issue has been that the Muslim world lacks a single set of standards for Shariah-compliant finance. Some jurisdictions, such as Saudi Arabia and Kuwait, are seen as more conservative and restrictive over financial structures than Malaysia or Indonesia, for example.

The equity market increased by 2.6 per cent to RM1.70 trillion from 2014, while the bond and sukuk market grew by 1.4 per cent to RM1.12 trillion.

The country is aiming to expand the offering of bonds and sukuk to the retail market, as well as to centralise information to enhance transparency, widen information access to investors and promote secondary market liquidity.