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Thursday 16 May 2013

Global sukuk market set to reach $292bn in issuances by 2016


By A Staff Reporter — MUSCAT — 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 27–28, for the 9th Annual World Islamic Funds and Financial Markets Conference (WIFFMC 2013) — the largest and most influential annual gathering of international leaders in the Islamic investments industry. Held in strategic partnership with the Central Bank of Bahrain, the 9th Annual 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”.


Announcing the launch of the event, David McLean, Chief Executive of the World Islamic Funds and Financial Markets Conference noted: “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. 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.” He also noted that “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. Recent industry estimates reveal that the global Sukuk market is expected to grow more than 140 per cent to reach $ 292 billion in issuances by 2016.”



“However 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 capitalising on its true potential”, he added.



Speaking ahead of the event, Abdul Rahman Mohammed al Baker, Executive Director — Financial Institutions Supervision, Central Bank of Bahrain, said: “The international Islamic banking and finance industry has come a long way and today has a diverse range of financial products and services flourishing throughout the Middle East, Europe, Asia and Africa. 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 Shariah-compliant investment vehicles — and supply continues to fall short of demand even with record issuances. 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.


(Oman Daily Observer / 16 May 2013)


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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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