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ASSETS TO GROW AT 20pc

Abdul Rahman Mohammed Al Baker

Global sukuk market to hit $292 billion

Manama, May 15, 2013

The global Sukuk market is expected to grow more than 140 per cent to reach $292 billion in issuances by 2016, said a top official ahead of an upcoming global Islamic funds summit in Bahrain.

“The potential size of the Islamic finance market is vast, and the sustained rapid pace in the growth of Islamic finance hinges on attracting new international investment flows as well as new capital market issuers,” added David McLean, chief executive of the World Islamic Funds and Financial Markets Conference (WIFFMC).

More than 400 key players, regulators and thought leaders in the global Islamic funds and investments industry are set to gather in Bahrain on May 27 and 28 for the ninth annual WIFFMC.

Held in strategic partnership with the Central Bank of Bahrain, WIFFMC 2013 will set the stage for critical discussions that will focus on “Broadening the Base of Investors and Issuers; and Boosting the International Growth of Islamic Capital Markets and Investments”.

“Today, the global Islamic finance industry has grown to become an increasingly substantial segment within the global financial markets and has gained significant interest as a viable and efficient alternative model of financial intermediation,” McLean continued, announcing the launch of the event.

“The industry has also recorded tremendous growth in the last few years, with some key markets reporting their Islamic finance industry to be growing 50 per cent faster than conventional finance. This positive trend can be attributed to the rapid geographical expansion of Islamic securities products and services that have enjoyed remarkable growth in key markets across Europe, Asia Pacific, Mena and the Central Asian states.”

“It is essential that some of the critical challenges in the Islamic funds and investments industry are urgently addressed in order to ensure that the industry has solid and strong foundations for future development and growth, fully capitalizing on its true potential”, he added.

The World Islamic Funds and Financial Markets Conference will be inaugurated by Abdul Rahman Mohammed Al Baker, executive director – Financial Institutions Supervision, Central Bank of Bahrain.

“The international Islamic banking and finance industry has a come a long way and today has a diverse range of financial products and services flourishing throughout the Middle East, Europe, Asia and Africa,” said Al Baker.

“Global Islamic banking assets held by commercial banks are set to cross $2 trillion in 2013, up from the $1.3 trillion of assets held in 2011 and the industry has been enjoying a remarkable growth rate of approximately 20 per cent.”

“However, notwithstanding this progress, there is still a substantial investable surplus in the Islamic world which is not being put to productive use due to a shortage of Shari’ah-compliant investment vehicles - and supply continues to fall short of demand even with record issuances,” Al Baker continued.

“Looking at the growth expectations of the global Islamic finance and investments industry and its growing global investor base, it is important that the industry further enhances innovation of new Islamic instruments and investment vehicles and reach out to markets outside its traditional boundaries.”

“Given the considerable capacity of Islamic finance to meet large investment requirements, I hope that the discussions at this year’s World Islamic Funds and Financial Markets Conference, held under the theme ‘Broadening the Base of Investors and Issuers’, will help to further realize the full potential of this vibrant industry,” he added.

Dr Khaled Al Fakih, secretary-general and chief executive officer of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), will deliver a keynote address which will analyse key strategies for adapting new global financial standards to the Islamic investments industry and creating stronger regulatory frameworks to support the international development of the Islamic funds and investments industry.

A key highlight of WIFFMC 2013 will be the high-profile CEO and Industry Leaders’ Power Debate. The session will highlight insights on overcoming the challenges facing the Islamic asset management industry and will address the need for cross-border distribution of funds and improving the competitiveness of Islamic funds.

Hasan S AlJabri, chief executive officer of Sedco Capital said: “Though the international Islamic finance industry has had some success on innovation, there is still room for more diversification in product development, geographic reach and asset class diversification. Islamic investors have traditionally found it difficult to access the same investment opportunities as conventional investors.”

“This lack of asset class diversity in Shari’ah-compliant investment products represents both a challenge and an opportunity. The significant increase in cross-border Islamic investment activities coupled with Islamic investors’ increasing recognition of the importance of diversification in their investment portfolio, calls for the Islamic funds and investments industry to tap into new asset classes and develop new funds for better diversification and portfolio management,” he added.

The prestigious WIFFMC 2013 Islamic Investment Institution of the Year Award will also be declared at the event. – TradeArabia News Service




Tags: Central Bank of Bahrain | sukuk | World Islamic Funds and Financial Markets Conference | WIFFMC |

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