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
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic funds and investments industry witnesses rapid global expansion

More than 400 key players, regulators and thought leaders in the global Islamic funds and investments industry are set to gather in the Kingdom of Bahrain on the 27th and 28th of May 2013 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% 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, "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% to reach $292bn 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 capitalizing on its true potential," he added.

The 9th Annual World Islamic Funds and Financial Markets Conference (WIFFMC 2013) will be inaugurated on the 27th of May with a special opening address by Abdul Rahman Mohammed Al Baker, Executive Director - Financial Institutions Supervision, Central Bank of Bahrain. 

Speaking ahead of the event, Abdul Rahman Mohammed Al Baker said, "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. Global Islamic banking assets held by commercial banks are set to cross US$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%. 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. 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 said.

He also said, "The Central Bank of Bahrain is once again delighted to be hosting this prestigious event."

The inaugural address will be immediately followed by a keynote address by Dr. Khaled Al Fakih, Secretary-General and Chief Executive Officer of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), 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 moderated by Dr. Sayd Farook, Global Head Islamic Capital Markets, Thomson Reuters and featuring Hasan S. AlJabri, Chief Executive Officer of SEDCO Capital; Rachid Ouaich, Chairman and Co-Founder of Islamic Finance Professionals' Association; and Mohieddine Kronfol, Chief Investment Officer Global Sukuk and MENA Fixed Income, Franklin Templeton Investments (ME) Limited, will share critical 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.

Confirming his participation at the event, Hasan S. AlJabri, Chief Executive Officer of SEDCO Capital, commented, "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."

"I am looking forward to the important discussions at this year's World Islamic Funds and Financial Markets Conference (WIFFMC 2013) that will seek to overcome the challenges in the global Islamic investments industry and improve the competitive position of Islamic funds and I am delighted to be a part of this important gathering of industry leaders," he noted.

The World Islamic Funds and Financial Markets Conference (WIFFMC), now in its 9th annual edition is set to gather more than 400 international industry leaders from over 120 leading organizations. The prestigious WIFFMC 2013 Islamic Investment Institution of the Year Award will also be declared at the event.

(Ame.Info / 16 May 2013)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic finance’s next step

The next growth trajectory for Islamic finance will come when organisations and nations involved in the sector are able to create a credible regulatory framework, according to an Islamic finance banker.

This would include wider implementation of standards produced by the Kuala Lumpur-based Islamic Financial Services Board (IFSB), and the involvement of Organisation of Islamic Conference nations and the Islamic Development Bank.

“On top of such effective regulatory framework, they need to have a conducive legislative framework in terms of legal framework and a robust Shariah governance,” said CIMB Islamic Bank Bhd ED/CEO Badlisyah Abdul Ghani.

“For a regulated activity to be executed successfully it has to have regulations.

“Once that is available, only then you will see the potential of Islamic finance, being a significant component of the global financial market, and be at par or even be bigger than conventional sectors, come into reality.”

He said Bank Negara Malaysia (BNM), regulator of the local banking sector, has adopted some of the guildelines issued by the IFSB.

“They have adopted these regulations in part, with perhaps some minor tweaking to suit local requirements.

“And that has impacted very positively on the regulations of the Malaysian market because at the end of the day it set the standards on how an Islamic bank should be governed in a healthy manner,” he told The Malaysian Reserve at the sideline of a pre-event for IFSB’s 10th Summit in Kuala Lumpur yesterday.

Badlisyah was one of the speakers at a forum jointly organised by IFSB and Islamic Research and Training Institute (IRTI) to conduct a midterm review of a 10-year framework and strategies for the Islamic financial services industry development.

Also speaking was Durham University Prof Habib Ahmed and Sharjah chair in Islamic finance.

IFSB is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.

It has thus far published 13 standards. The first, IFSB-1, was entitled “Guiding Principles of Risk Management for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS)” was issued in 2005.

The second, also issued in 2005, was on capital adequacy standard. The latest, issued last year, was “IFSB-13: Guiding Principles on Stress Testing for Institutions offering Islamic Financial Services”.

Badlisyah said there is no doubt that Islamic finance and Islamic banking have caught the attention of regulators and governments across the globe, turning it into an engine for growth.

On the overall outlook of the Islamic banking and finance system, he said the sector will see more growth.

“Islamic finance outlook is very good, it has never been better. It is undoubtedly growing very fast, with greater awareness about the market on a global scale.

“It has caught the attention of all stakeholders, global regulators, consumers and government legislators. As a result of this, the situation is getting better for Islamic finance,” he said.

(The Malaysian Reserve / 15 May 2013)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com