(IPE.com) - Competition for the estimated US$1 trillion in Islamic funds is intensifying with the Bursa Malaysia Bhd and Bahrain Financial Exchange (BFX) this week signing a memorandum of understanding in Bahrain to develop a commercial agreement between the two exchanges.

Under the Bursa – BFX deal a feasibility study will be conducted to identify products and market channels. Bursa CEO Datuk Yusli Mohamed Yusoff Yusli says “This is a major step towards consolidation in the Islamic finance world. As Malaysia and the Middle East are the leading centres of Islamic finance, and as both Exchanges come together on a single platform, this will add to the strength of this industry.”

Yusli said the collaboration was aimed at widening market reach, exchanging technological expertise and building a sustainable business model for both exchanges.