ID :
389696
Wed, 12/02/2015 - 04:42
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Islamic Finance To Continue Global Footprint

From Farhana Poniman BAHRAIN, Dec 2 (Bernama) -- Islamic finance will continue to grow its global footprint with much of its expansion attributed to product diversification and industry players' effort in developing the Islamic capital market. Despite uncertainties in the global economy, Bahrain Economic Development Board Chief Economist Dr Jarmo Kotilaine said the sector continued to see extensive growth alongside the establishment of more mature companies. "We are seeing more work being done to develop the Islamic capital markets, as well as the development of tools that give Islamic financial institutions more flexibility to create more investment opportunities. "However, the growth rate of Islamic finance in the near-term will also be tested by the commodity price weakness, given the clear correlation between oil price and Islamic wealth," he told a media briefing here Tuesday. According to historical data, he said the decline in oil price would lead to a much slower Islamic wealth creation globally. For sukuk issuance, however, Kotilaine had a mixed outlook. On one hand, he said it is positive in the sense that the sukuk is more established asset class, better understood and cost-competitive, while on the other hand, the nervousness in the global economy tends to delay issuance. "There are greater demand for it due to the growing Islamic investor base, especially institutional investors. "Sukuk is a very good way to gain exposure to the market. However, we may see a bit more volatility in terms of volumes, given the nervousness in the global economy," he added. Kotilaine is one of the speakers at the 22nd Annual World Islamic Banking Conference 2015, organised by the Middle East Global Advisors and supported by the Central Bank of Bahrain, until Thursday. --BERNAMA

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