MANAMA: It is estimated that Islamic financial industry assets globally reached $1.5 trillion as of the end of 2013, and it is expected to exceed $ 2 trillion by 2016, according to senior official at the Central Bank of Bahrain (CBB).
“Growing demand for investing in accordance with Shariah principles on a global scale have been the catalyst towards making the Islamic financial services a flourishing industry, ” Abdul Rahman Al Baker, Executive Director of Financial Institutions Supervision at the CBB told the 10th edition of the Islamic funds conference.
Addressing the two-day Annual World Islamic Funds and Islamic Financial Markets Conference, which opened on Monday in Manama, applauded the ongoing dialogue and debate on Islamic Investment industry.
He said that presentations and discussions during this conference would highlight and deliberate on important areas of Islamic Investment industry that would contribute towards further development and growth of the global Islamic financial services industry.
“Islamic asset management has come a long way since the late 70s when it began as a way for Islamic banks to make use of their excess funds. Today, as with other forms of Islamic finance, the industry is an area that has grown to become an increasingly substantial segment within the international financial markets and has gained significant interest as a viable and efficient alternative model of financial intermediation,” he said.
“There are more than 600 funds globally that comply with Islamic principles, of which one third of these funds were launched during the past eight years. Sukuk is another Islamic financial instrument that shows a significant growth during the past five years. It was estimated that the global Sukuk market reached $272 billion as of the end of the first quarter of 2014, a growth of almost 16% compared to the same period last year. Actually, the year 2014 saw a revival in the global sukuk markets due mainly to gradual recovery of global economy, investors’ sentiment which drives the demand for sukuk and a number of countries in Europe, Asia and North Africa are expected to launch their sukuk for the first time this year. It is clear that sukuk issuance in the first quarter of 2014 which reached US$ 31.1 billion has maintained the average quarterly new issuance volume level of the last two years globally, of which sovereign issuance accounted for almost 60% while corporates took 24% and Quasi-sovereign or government-related entities accounted for 16% of the total Sukuk.
“In spite of the recent credit crunch in the international markets, the prospects for growth in Islamic securities markets are likely to be positive. This positive trend can be attributed to the rapid expansion and increasing sophistication of the GCC financial markets, as well as the geographical spread of Islamic securities products and services that recorded outstanding growth in Europe, Asia Pacific countries, North Africa as well as Central Asian countries.