Islamic investment banks will have an important role to play in 2009 says CAPIVEST.
As market conditions begin to show signs of improvement, investors are increasingly looking for Sharia compliant investment opportunities, says CAPIVEST, the Bahrain based Islamic investment bank. Recently, banks have started seeing signs of a return of business confidence, both regionally and internationally, with investors now looking for more transparent and ethically structured products. For many investors this means that they will be opting for Islamic Investment products. There has been exponential growth in Islamic Finance over the last few years with assets under management reaching US$ 660 billion in 2007 up from just over US$ 200 billion in 2003, and they are now expected to reach US$ 1,200 billion in 2012 (Oliver Wyman 2009 -- Next Chapter in Islamic Finance). This growth is also linked to banks diversifying their activities away from a straightforward lending facility and moving to develop a full range of treasury products.Hasan Habib Hasan, Executive Director of Treasury & Financial Institutions at CAPIVEST, said: "Investment products that adhere to Islamic principles offer today's investor some clear benefits. The ban on interest, investments in highly leveraged assets, speculation, trading debt and complex structured products takes out many of the risks that led to the collapse or meltdown of some prime banks. Business risk is associated with reward and it is not possible to build a portfolio of toxic assets. Most investments do not provide protected returns, but investors are looking for investment institutions to share the risk and back their own products."
"The Islamic Financial Industry would be making a great mistake if it believes that it now needs to sit back, consolidate its position and wait to see what happens with global markets. This is the time we should all be looking to develop new and innovative ways of servicing the emerging investor confidence with Sharia compliant products and investments. This is a time to seek out distressed investment opportunities."An issue limiting the growth of Islamic Investment Products in the past has been a perceived lack of visibility of the products and potential returns. The recent development of new and well respected indices has dealt with this concern and led to much greater transparency. This has also led to a growing appetite worldwide for Islamic products."In 2009, international and regional investors, looking for appropriate returns with capital protection and with a long term view of the market will require Sharia compliant investment opportunities which meet their investment needs. Bahrain is growing in stature as a center for Islamic finance and must now lead the way in developing a new generation of products and services. We have a stable and well regulated market which is extremely important as we rebuild business confidence and trust." "If we are now seeing the first signs of recovery, Bahrain and the Islamic Financial Industry must make sure that it is ready to capitalize on this," added Mr. Hasan Habib Hassan.
2009 Al Bawaba (www.albawaba.com)
2009 Al Bawaba (Albawaba.com)
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|Date:||Apr 23, 2009|
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