KUALA LUMPUR, March 9 (Bernama) -- The Dubai debt crisis does not represent a permanent setback to Islamic finance eventhough the sukuk or Islamic bonds suffered a blow as potentially safer instrument than conventional. Deputy Minister of International Trade and Industry Datuk Mukhriz Mahathir said this was because of the reasonable disenchantment with the banking and financial system as practised in the West.

However, a marked slowdown in business could occur, he said at the launch of the Amanah Mutual Bhd Shariah-compliant close-ended fund AMB Dana Aqeel Capital Protected on Tuesday.

Mukhriz said the Islamic finance players in the country must be prepared to counter the impending negative effects from the uncertainties in the global market.

"We must aggressively open up new markets following the present capital-surplus countries that have been buying our Islamic products may be undergoing a slowdown from reduced revenue in commodities," he said.

Mukhriz said the Islamic unit trusts in the country has emerged as a significant growth area for the overall unit trust and fund management industry.

From just 17 products in 2000, the unit trust industry now offers 144 Islamic unit trusts products in both equity and bond categories, he said.

"The viability of Islamic unit trusts is evident from their acceptance by investors with the total net asset value (NAV) of the products touching RM22.0 billion or 11 per cent of the entire industry's NAV of RM200 billion," he added.

-- BERNAMA