Shariah investment convention to discuss issues of convergence and uniformity JEDDAH: Increasing popularity of Islamic funds and the revival of the Sukuk in the global financial markets will serve as a catalyst for the global Islamic finance market rediscovering the momentum it previously built up prior to the global financial crisis, organizers of the upcoming two-day International Shariah Investment Convention (ISIC) in Kuala Lumpur said. Worldwide Shariah-compliant assets, including deposits at Islamic finance institutions, have been pegged at $950 billion by Moody's but could grow to $1.6 trillion by 2012. Large global financiers such as Citigroup and HSBC holdings are aggressively chasing this business via Sukuk and Shariah-approved products, said a leading industry expert. The conference that will start on Nov. 30 will focus on enhancing Shariah-compliant instruments “so that they become more reliable, transparent, and concerned with real economic activity,” Dr. Mohd Daud Bakar, president/CEO of Amanie Islamic Finance Consultancy and Education LLC, said in a statement. “Financial markets across the world are still recovering and are adapting their systems, processes and institutions to better insulate them against future challenges. To date, the strong interest in Islamic investments and Sukuk products has been maintained, which to date have often been subscribed by investors beyond the Muslim world,” he noted. The Sukuk market alone saw positive developments following the global financial crisis with worldwide issuances increased to $23 billion in 2009 from $19 billion in 2008, highlighting continuing demand for the asset-class. The market continues to show its resilience especially in Asia where big name quasi- sovereign related issues such as the Islamic Development Bank 1 billion Malaysian ringgit and the National Bank of Abu Dhabi's 500 million Malaysian ringgit issuance. The renewed activity in the Sukuk market will be the catalyst for the growth in the next cycle, Dr. Bakar said, citing the recent launch of a $$200 million Islamic bond sale by Dubai-based Al Baraka Banking Group, which will help to fund its expansion into France and up to five other subsidiaries throughout Europe. Amanie partnered with the Securities Commission (SC) of Malaysia and Bursa Malaysia in holding the convention. As part of their commitment to the industry's development, the SC, Bursa Malaysia and Amanie will bring together representatives from regulatory bodies, investors, fund management houses to discuss key issues such as the importance of establishing proper cross-border distribution channels for funds, the importance of continued expansion in Sukuk markets, and the importance of strong regulatory oversight. ISIC will also provide a forum to discuss issues of convergence and uniformity that have been some of the major challenges impeding the growth of Islamic finance. Dato' Yusli Mohamed Yusoff, chief executive officer of Bursa Malaysia, said “Bursa Malaysia remains committed in furthering the Malaysian International Islamic Financial Centre (MIFC)'s agenda of making the country a global hub for Islamic finance. As such, the growth of the Sukuk listing on Bursa Malaysia is unprecedented, signaling the bourse's appeal as the preferred listing destination for Islamic financial instruments. Over the past year, Bursa Malaysia has already witnessed major Sukuk listings by both the local and international issuers.” Dr. Bakar added that “conventional market players will continue to adapt Islamic finance products to cater to the ever-growing demand and many sovereign nations will resort to amend their regulatory frameworks to allow Shariah-compliant structures to be used in their jurisdiction.
