Government-owned Pelaburan Hartanah Bumiputra on Monday launched a RM1 billion (317 billion dollar) investment trust in a bid to encourage Malays to invest more in property.

The sharia-compliant Real Estate Investment Trust (REIT) would allow Malays and indigenous groups to increase their stake in real estate assets, said Prime Minister Najib Abdul Razak at the launch.

"I hope that this initiative... will receive the rightful support from the bumiputras, which will in turn contribute to the overall balance of the country's economy," said the premier, who is also the company's chairperson.

Bumiputra investors can buy into the REIT with a minimum investment of RM500 (159 dollars) and can invest up to RM200,000 in the trust, Najib said.

In June, he unveiled a development plan to spur growth and attract much-needed foreign investment as the country faces increasing competition from regional neighbours.

As part of the plan, Najib said the government would roll out programmes to enhance bumiputra capabilities.

A decades-old affirmative action policy that hands bumiputras privileges in housing, education and business has been criticised as uncompetitive and improperly benefiting the elites.

Malaysia has also been promoting Islamic finance - which follows religious laws prohibiting the payment and collection of interest -  and has emerged relatively unscathed from the global financial crisis.

- AFP