KUALA LUMPUR: The Malaysia International Islamic Financial Centre will continue to strengthen the financial linkages between Malaysia and the Middle East to attract more investments from the region. 
Bank Negara deputy governor Datuk Mohd Razif Abdul Kadir said demand for Islamic investments was growing as oil money flooded the Gulf region and high net worth individuals in the Middle East saw increasing wealth. 
In his keynote address at the IIUM International Conference on Islamic Banking and Finance 2007, Razif said the US and European share of Gulf wealth was eroding, thus providing Malaysia a chance to tap this wealth to develop a leading Islamic financial centre. 
“We (Malaysia) are at the right position to become an effective gateway. The central bank's continued liberalisation of the Islamic financial sector will help Malaysia become an Islamic financial hub,” he said. 
He said the country faced competition from its neighbours, including Singapore, which had started wooing Islamic funds. 
Razif said Malaysia had a strong potential to be a centre for sukuk origination as 67%, or US$32bil, of the outstanding sukuk issuance globally were originated from Malaysia. 
“The global and local sovereign or corporate sukuk market, which exceeded US$50bil, is expected to surpass US$150bil by 2010,” he said. 
He said Malaysia was the third largest global sukuk issuer behind United Arab Emirates and Bahrain. 
Razif said the Islamic banking had also resulted in a rise in the number of employment in the banking industry. 
Total employees of the Islamic banks has increased by 80% to 5,151 last year from 2,869 in 2001. 
The operating environment of Islamic finance in Malaysia has evolved dramatically in the past few years to include more products accepted by investors in the Middle East. 
Razif said the diverse type of Islamic instruments offered in Malaysia gave issuers and investors a wide choice of selection based on their financing needs, preference and risks profile. 
“The development of Malaysia as an Islamic financial hub will help spur investment and economic activity in the country,” he said.