The diverse range of institutional investors creates a strong demand for sukuk that efficiently channel funds and liquidity in the market. Tesco, a UK-based company, opted for sukuk issuance rather than bond under its conventional and Islamic MTN program due to the cost effectiveness of issuing the former. We welcome sukuk issuances by other foreign entities, leveraging on Malaysia’s expertise and framework. New development in Malaysia Malaysia has promulgated the new Islamic Financial Services Act or IFSA in 2013 to provide for a comprehensive regulation and supervision of Islamic financial sector in compliance with Shariah. Under IFSA, Islamic banks are required to segregate deposits that are principle guaranteed from investment accounts that are non-principal guaranteed. This allows Islamic banks to develop a wider range of products to meet investor risk-return preferences where the return to the investor will be more directly linked with the performance of the deposit fund. The financing extend beyond debt-based to include equity-based financing. This effort will further promote economic growth by broadening the financial intermediary role of Islamic banks. Way forward The Forum today marks a new phase in our relationship as the industry players in both countries are taking the lead in sharing insights, exchanging ideas and taking efforts to encourage cross-border Islamic finance transactions. The UK-Malaysia unique niches create immense synergistic collaboration, leveraging on our respective strengths to accomplish mutually rewarding outcomes.
However, price developments are uncertain even six months to a year ahead. There was thus a possibility that inflation could fall even lower than projected, and be more than one percentage point below target. As from May 2003, core inflation (measured by the CPI-ATE) has been more than one percentage point below target. Average core inflation in 2003 is now projected at 1¼ per cent. The difference between the outcome and the projection thus proved nevertheless to be unusually wide, largely reflecting the fact that the economy was exposed to sizeable, unexpected disturbances. Inflation through 2003 has been pushed down in particular by the fall in prices for imported consumer goods. The low rise in imported price inflation is a consequence of the appreciation of the krone throughout 2002 and low inflation abroad. The rise in prices for domestically produced goods and services has also slowed somewhat. This is particularly the case for prices for domestically produced goods influenced by world market prices. Weaker than expected economic developments in 2003 The krone appreciated more in autumn 2002 and at the end of the year than assumed in our projections. This was related to unexpectedly weak developments in the global economy resulting in lower interest rates abroad and a wider interest rate differential between Norway and other countries. 1  A measure of core inflation is the rise in consumer prices adjusted for tax changes and excluding energy products (CPI-ATE).