April 14, 2014 / 6:53 AM / 6 years ago

Malaysia's PNB forms Japan's first sharia-focused fund with local partner

KUALA LUMPUR, April 14 (Reuters) - Malaysia’s largest asset manager Permodalan Nasional Bhd has partnered with Tokyo-based Inspire Corp to form Japan’s first fund devoted to investing in Malaysian sharia-compliant firms.

PNB-Inspire Ethical Fund will start with 4.95 billion yen ($48.70 million) and identify small-to-medium sized Japanese firms with potential for expanding to Islamic markets in ASEAN, according to a statement by Inspire Corp.

It hopes to rope in more regional banks to grow to 6 billion yen ($59.03 million) by the end of the year. Japan’s Oita Bank and Hiroshima Bank are listed as limited partners for the fund.

Islamic finance is emerging as a popular entry point for global firms to tap into the growth of Muslim-majority countries within Asia.

Sumitomo Mitsui Banking Corp, a unit of Sumitomo Mitsui Financial Group, last month established an Islamic finance arm in Malaysia to capture demand for sharia-compliant loans within Southeast Asia.

$1 = 101.6400 Japanese Yen Reporting by Al-Zaquan Amer Hamzah; Editing by Stephen Coates

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