Backed by last year’s strong economic performance and key economic reforms, Malaysia is set to record another above 5% growth in GDP in the next 12 months. Underpinning this year’s growth is the emphasis on infrastructure that supports the government’s medium-term goal to transform Malaysia into a high-income advanced economy by 2020. But it is not just growth for growth’s sake. In the 2018 budget, the government showed its commitment to sustainable and responsible investment through schemes such as income tax exemption for special green SRI sukuk recipients as well as expansion of tax incentives to conventional SRI fund managers from 2018 to 2020.
Already, Malaysia stands out as the world’s most successful sukuk market. In 2017, the country once again topped the global ranking for sukuk issuances. Although Malaysia’s share in global sukuk issuances has narrowed, the variety of issuers has grown. As always, the government is bolstering the market not just with new sukuk issuances, but also with innovation. It priced a dual-tranche offering in April 2017 as it became the first sovereign to access the global sukuk market without utilizing physical assets.