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Islamic Finance Shows Resilience As London Consolidates Position As Key Western Centre

The global market for Islamic financial services rose by 37% to $729bn at end-2007. In 2008, IFSL’s Islamic Finance report notes that the industry has felt the influence of the credit crunch and downturn in the global economy – Sukuk issuance has more than halved and the value of equity funds has fallen. Islamic banks, however, have been less affected than many conventional banks as they are prohibited from activities that have contributed to the credit crunch, such as investment in toxic assets and dependence on wholesale funds.

London has been consolidating its position as the key western centre for Islamic finance in 2008. Two Islamic banks, Gatehouse Bank and European Finance House, have been granted licences bringing to five the number of fully Sharia compliant banks in the UK. Principal Insurance became the first Shariah compliant independent company authorised to offer Takaful to UK residents. In capital markets, four new exchange traded funds and two new equity funds were launched.

IFSL’s report indicates that the UK’s offering includes a total of 22 banks, far more than in any other Western country. Professional services are provided by 18 law firms and the Big Four accounting firms. A cumulative total of 18 Sukuk issues raising $10bn have been listed on the London Stock Exchange, second only to Dubai. With 55 institutions offering educational and training products in Islamic finance, the UK has more providers than any other country worldwide.

Duncan McKenzie, IFSL’s Director of Economics said “The UK has benefitted considerably from supportive government policies intended to put Islamic services on the same footing as conventional services. Evidence of London’s growing role in Islamic finance is shown in the UK being the only western country to feature prominently, 8th with assets of $18bn, in a global ranking of Sharia compliant assets by country.”

Sir Andrew Cahn, UK Trade & Investment’s Chief Executive Officer said: “Despite its origins overseas, Islamic finance has found a natural home in the UK. Though no sector is immune to the global financial crisis, Islamic finance has shown great resilience. It is important we continue to work with our Islamic finance partners to maintain our position as the leading western centre for Islamic finance service providers.”

Source: Mondovisione, Exchange News 09.02.2009

Filed under: Islamic Finance, News, , , , , , , , , ,

Islamic Financing in Latin America: Brazil & Malaysia

Investment opportunities in Islamic markets, basic concepts of Islamic finance and the importance of regulator agencies in developing these markets were among the main topics of the fifth edition of “The Islamic World’s Financial and Capital Markets: Opportunities and Challenges.” Brazil’s Securities and Exchange Commission (CVM) and the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA) sponsored the conference, which took place on December 8th.

Mercado Financeiro Islamico – ABC do Brasil 12.2008

Islamic Finance in Asia: MALAYSA the Islamic Finance Hub

Malaysia Opportunities in Islamic Finance – Bank Negara 12.2008

Islamic Finance Defined and Market Review – HSBC 12.2008

In his opening remarks, CVM Director, Sergio Weguelin, highlighted the importance of establishing a dialogue between market participants with the goal of bringing our two different systems close together. “These are two financial cultures that have much to offer to each other. (Islamic finance) has grown 15% annually, according to IOSCO (International Organization of Securities Commissions,)” he said. Weguelin added that “a larger incorporation by the traditional financial system of concepts that guide Islamic practices, such as the requirement to share risks, would have minimized the abuses that led to the subprime-mortgage crisis.”

BM&FBOVESPA’s International Director, João Lauro Amaral, highlighted the growth potential pf this market in his presentation. “Today the Exchange only has 30 non-resident investment accounts from the Middle East or other Islamic countries, mostly from the United Arab Emirates, which shows the potential we have for developing the growth between our markets,” he said, referring to the participation of Islamic investors in emerging markets such as Brazil.

Banco ABC Brasil S.A.’s International Department Director, Angela Martins, explained principles and characteristics of Islamic finance, such as the concept of Sukuk – “a certificate issued under Islamic law, backed by a contract accepted by Shariah law,” she said. She also explained that money in the Muslim world is not viewed as a commodity, but “as means to add value, without which one would not be able to generate wealth,” she said.

The Vice-President of Global Capital Markets at HSBC in New York, Alexei Remizov, highlighted the importance of the Islamic finance industry in the Persian Gulf countries. Nik Ramlah Mahmood and Kris Azman Abdullah, Directors at Malaysia’s financial regulator agency, discussed Islamic capital markets in Malaysia, and Anthony Saint, with London’s Gatehouse Bank, discussed operations of Islamic banks in the U.K.

Source: Mondovision, 13.12.2008

Filed under: Banking, BM&FBOVESPA, Brazil, Exchanges, Islamic Finance, Library, Malaysia, News, , , , , , , , , , , , , , , , , , , , ,