And how is pricing? Logically, it ought to be better than in the conventional markets since the pool of investors who can be approached is bigger. But bankers do not report a big difference. “The Islamic bit generally adds a bit of depth to the distribution,” says one foreign banker. “It doesn’t necessarily mean that your price is much tighter or your volume goes up.”

The hope is that Islamic finance will put Malaysia on the map as a whole new venue for global fundraising. “The target is that one day, where roadshows used to go to the States, London, Hong Kong, they will instead also go to Malaysia, Dubai, Bahrain, Saudi, Qatar,” says Seohan Soo, head of debt capital markets at AmInvestment Bank. “Hopefully the Islamic funds will be another avenue of producing liquidity.”

 This article was one of a series in IFR Asia’s Malaysia debt markets report, April 2009

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