OIC market capitalisation 'stays low'
Manama, August 31, 2010
The market capitalisation of equity markets in Organization of Islamic Conference (OIC) countries remains low compared to other leading markets, a report said.
The total market cpaitlaisation of 28 selected member countries of OIC stood at $1.86 trillion with a total of 6,655 companies listed, a new research conducted by Bahrain-based Islamic International Rating Agency and Dinar Standard of US, stated.
This was even less than the Shanghai Stock Exchange whose market capitalization stood at $2.19 trillion with only 879 companies listed, it added.
The research selected 28 major OIC markets based upon a combination of quantitative and qualitative assessment of data sourced from Dinarstandard.com and the referenced third-party sources.
The research summarised the current state of Islamic capital flow within its core OIC markets and also assessed the pulse of the OIC Islamic Capital Markets. It aims to provide investors, finance managers, and investment managers with a broad overview of areas of opportunities for them.
The study covers three key representative sectors: the stock markets, the flagship industry segment of Sukuk (Islamic Bonds) and the Islamic Funds market.
On the Islamic captal market growth, the study said the largest market among OIC member countries by market capitalization was Saudi Tadawul with $327 billion, while in terms of number of listings Bursa Malaysia Berhad emerged on top with 967 companies.
The fastest growing bourse in terms of market capitalization from January 1 to June 30 this year was Dhaka Stock Exchange, it added.
On the Sukuk market, the study said that after reaching a peak of 2007, the industry suffered a dramatic decline in 2008 hit hard by global financial crisis and questions on Shari’a compliance.
Added to that was default by some of the Sukuk issuers which did not help the situation either, said the study.
However, in 2009, the situation seemed to have improved a bit with total issuances of $23 billion up from $19 billion in 2008. As of June 2010, there were a total of 1582 global Sukuk issues outstanding with a total value of $137 billion, the joint study said.
'However, 88 per cent of the Sukuk are not listed and except for Malaysia, most of the Sukuks are unrated compared to conventional bonds, where it is norm to obtain ratings. The absence of ratings has also limited the growth of Sukuk markets particularly among the mid market players.'
In terms of Islamic Funds market, as of June 2010, there were 504 Islamic mutual funds globally with total assets under management of $31 billion.
Comparing it to the global funds sector, which stood at $22.8 trillion in total assets under management, Islamic Funds are still at very early stage, the duo pointed out in the study.
However, given that the OIC markets are now roughly 11 per cent of the global economy, there is a significant room for growth in this sector, it added.
In terms of asset class, 45 per cent are equity funds while 32 per cent are money market funds. Among the key challenges to this sector is the size of Islamic funds as 80 per cent of them are less than $50 million, it added.-TradeArabia News Service
More Finance & Capital Market Stories
- Emaar proposes 15pc cash dividends
- ABG units win top Islamic finance award
- Finance House approves 25pc cash dividends
- Qatar 'most expensive country in Gulf'
- Egypt regulator sets rules for index
- Dubai Islamic eyes Kenya, Indonesia for expansion
- ADCB to buy back 3pc of its shares
- GCC insurance growth outpaces developed markets
- Bahrain 'faces budget deficit, inflation challenges'
- Global Payment Services wins key certification
- BBK unveils big India expansion plans
- Kuwait GDP growth to hit 3.5pc in 2014
- Gulf shares tumble over EM exposure cut
- GCC bonds to gain from macro-economic climate
- French Business Council Dubai members up 18pc
- Egypt economy growth seen less strong than thought
- Sharjah approves $4.2bn budget for 2014
- Saudi non-oil sector posts solid growth in Feb
- Seera total income rises to $34m
- NBAD approves 40pc cash dividends
- NBAD sees 8-10pc loan growth
- Al Basel Group launches investment arm
- Union Insurance posts $18m profit
- Oman warns banks on conflicts of interest
- Japan to lend Tunisia $480m
- 400 to join anti-laundering seminar in Riyadh
- Lebanese insurer to head Prague Club
- UAE's first REIT plans $135m IPO
- Bahrain banking industry outlook 'positive'
- New India Assurance opens Bahrain branch