KUALA LUMPUR: The Employees Provident Fund’s (EPF) explicit allocation of US$25bil to a new fund dedicated to syariah-compliant investment is set to boost the sukuk market, said Moody’s Investors Service. Its Global Head of Islamic Finance, Khalid Howladar, said the allocation, which represented 15% of the EPF’s investment, would create the largest standalone Islamic pension fund globally, which was rare in the industry. The international ratings agency said EPF’s new pension scheme would likely boost the demand for sukuk and syariah-compliant securities. “When external investors see the government pension fund participating, it will encourage them to issue sukuk, knowing that somebody has explicit allocation. Moody’s also noted that Malaysia’s second largest pension fund, Kumpulan Wang Persaraan, with a total size of US$30bil, had also announced its plan to become a full-fledged Islamic pension fund.

Source: The Star September 20, 2016 23:55 UTC