Turkey's RHEA signs deal with CIMB-Principal

A Turkish investment management company signed Friday an agreement with a Malaysian Islamic asset management company to help it set up Turkish Shariah-compliant assets.

"We are honored and excited by our potential cooperation with CIMB-Principal Islamic. Istanbul deservedly aspires to become a global financial center," Onur Takmak, Founder and Chairman of RHEA Asset Management(RAM ) said. "We have carried this message across the world over the last five years and formed partnerships to bring in relevant credentials and know-how as well as facilitate "smart" capital flows to Turkey.

Takmak said the corporation between two companies is a major step towards developing Islamic investment instruments in Turkey.

"We are hoping to contribute to further development of the Turkish economy and savings market," he said.

According to Borsa Istanbul, Turkey's main stock exchange, the Islamic finance industry's assets are projected to amount to $6.5 trillion by 2020. 18 Islamic sukuk (bonds) worth $7.2 billion have been issued in Turkey since 2010.

Experts say with new innovation within the Islamic financial framework would further prosper the global Islamic financial industry, which is expected to grow to US$2 trillion this year.

Islamic finance is a system that has existed for over a century, but has only really taken off in the last 40 years. The system broadly refers to financial market transactions, operations and services that comply with Islamic rules, principles and code of practices.

In conventional wealth management, the objective is to ensure a person's wealth will be able to give as much returns as it can without considering the investment being invested in vehicles that gains interest.

In Islamic wealth management, however, the objective helps to ensure that a person's wealth is managed in such a way that it will improve or give a much better return with the said investment using all sorts of investment vehicles.

For a Muslim, Islamic wealth management practice is mandatory as it is a sin to leave a problem upon death without resolving it during the lifetime when he or she is in the capacity to resolve it.

Malaysia is known as one of the global leaders of Islamic finance, with the country currently the world's largest sukuk issuer, the second largest Islamic insurance - Takaful - market and the third largest Islamic banking market.

Sukuk is the Arabic word for financial certificates, but can also refers to the Islamic equivalent of bonds.