TAIEX eyes launch of Shariah fund in H2
KUALA LUMPUR — Taiwan’s stock exchange (TAIEX) will launch an Islamic exchange traded fund in the second half of this year to tap growing demand for Shariah-compliant investments, its chairman said yesterday.
“The compilation of stocks for Taiwan’s first Shariah exchange traded fund is expected to be completed in the next two to three months,” Wu Rong-i told reporters on a visit to the Malaysian capital to woo investment.
“Since Malaysia is a Muslim country, we think a Shariah-compliant exchange traded fund may be marketable here.”
The Taiwanese exchange has been stepping up efforts to attract oil money from the Middle East. In December, it entered into a preliminary deal to list its planned Shariah exchange traded fund in Taiwan and Abu Dhabi.
“We have had a few rounds of talks with Abu Dhabi Securities Market,” said Wu.
Shariah, or Islamic law, forbids interest and prohibits investment in sectors such as alcohol and gambling. Islamic assets are growing at an annual pace of around 20 percent and are set to hit US$2 trillion in 2010 from US$900 billion now, Ernst & Young forecasted in February.
The Taiwanese exchange also plans to list the fund on other markets in Asia, including Malaysia, Wu said. But it has not started talks with its Malaysian counterpart on the potential dual-listing of the fund, he added.
“We are open, we are interested to work with any exchanges,” Wu said.
Mostly Muslim Malaysia is a world leader in Islamic finance, accounting for about 60 percent of global Islamic bonds outstanding which are worth about US$100 billion, according to central bank estimates.