JAKARTA (Yosefardi) – In order to increase the potential growth of the Islamic financial markets, the Indonesia Stock Exchange (IDX) and Bursa Malaysia Tuesday (August 2) announced the signing of the Memorandum of Understanding (MOU) for cooperation to develop Islamic capital markets both in Malaysia and Indonesia.

This MOU is the renewal the Memorandum of Understanding that has been made by the two countries earlier in 1996. The memorandum was last updated in 2006.

This MoU serves to formalise the earnest intent of both exchanges to collaborate in enriching offerings in our capital markets, and broadening the usage and availability of Islamic liquidity and products.
For Malaysia, Indonesia is the seventh largest trading partner and third among the ASEAN Countries as of 2015, with a healthy level of current and new business opportunities between the two countries. With a total population of almost 300 million, both countries have much to offer and benefit from this MOU for retail and institutional investors.

Islamic economy has been developing rapidly to become one of the fastest growing markets in the world, which is in contrast to the slowdown of global economy. With a consumer base of 1.7 billion Muslims around the world, dominated by young population, and a growth rate as twice as that of the world population, Islamic market offers solution to support global economic growth in the future.

Based on a report in the State of the Global Islamic Economy 2015, global Islamic markets are estimated to have US$1.81 trillion assets in value. From that number, US$295 billion is an outstanding value of sukuk with an average 6% growth per year.

The value of global Islamic financial market assets in 2014 had increased of 9.69% compared to US $ 1.65 trillion in 2013.
With the growth of the Islamic financial market in the world, the assets of the global Islamic financial market is expected to grow to US $ 3.24 trillion in 2020.

Based on the total assets of the Islamic markets, there are two countries in the ASEAN that are included in the top 10 countries with the largest Islamic financial market in the world: Malaysia who is currently the largest Islamic financial market in the world and Indonesia who has the largest Muslim population in the world. With a total population of 250 million people, Indonesia also has the potential to become a large Islamic market in the future.