A few financial conglomerates from Japan have expressed interest to work with Aseambankers Malaysia Bhd in developing Islamic capital market products, its chief executive officer Mohammed Rashdan Mohammed Yusof said.

Without naming the conglomerates because of confidentiality requirements, he said that they were seeking two-way cooperation with Aseambankers.

While Aseambankers plans to enhance the sukuk market in Japan, the conglomerates, through the Malaysia Inter-national Islamic Finance Centre (MIFC), are keen to invest in the region.

"We are seriously looking into this (Japanese) market," Mohammed Rashdan said in an interview with Business Times in Kuala Lumpur.

He did not specify when the deals would be sealed since "the global financial market is still highly volatile and stressed (so) that even the most optimistic of these investors would really want to pick the best time".

According to Mohammed Rashdan, Islamic finance has attracted interest not only in Japan but also South Korea of late, partly because of the general collapse of the conventional financial system across the world.

He pointed out that Islamic finance does not encourage excessive leverage or use of derivatives and is viewed as safe in terms of having underlying asset values backing the financial instruments.

"There is ample global liquidity resident in the Gulf. Greater participation from Japanese and Korean institutions will attract that liquidity into this region, and we hope to be right there in that playing field," he said.

Apart from this, Aseambankers is also working on "a significant mandate" with a party from Saudi Arabia, despite the challenges posed by the current financial crisis.

The Malayan Banking Bhd (Maybank) group's key outpost in the Gulf is in Bahrain. It is also looking at other potential locations, especially Saudi Arabia and the United Arab Emirates, specifically Abu Dhabi.

"Through Bahrain we have done several smaller mandates in the Gulf, but the one we are working on now is significant," Mohamed Rashdan said, without elaborating.

He also said that Maybank's recent completion of its acquisition of Bank Internasional Indonesia (BII) would provide Aseambankers an opportunity to expand its reach. Aseambankers is Maybank's investment banking arm.

"There is great potential there, especially Islamic banking opportunities which are still nascent.

"Furthermore, Aseambankers can leverage on the BII platform to launch investment banking and brokerage services in Indonesia," Mohamed Rashdan said.

Aseambankers is also looking at setting up key offices in Singapore and Hong Kong, he added.