National Tourism Strategy 2031 aims to increase the contribution of the UAE tourism sector to the national GDP to Dh450 billion
business9 hours ago
Industry expert has called for increased regulation and standarisation of Shariah-compliant products as the Islamic finance industry's global reach becomes wider.
"For many practitioners of Islamic finance, the solution to the issue of variability of interpretation is the establishment of detailed common standards. However, we would support the development of principal standards, clearly stating unacceptable practices, but otherwise leaving room for interpretation and development," said Mohieddine Kronfol, chief investment officer, Global Sukuk and Mena Fixed Income at Franklin Local Asset Management.
In recent years, the Shariah finance industry has expanded to include many individuals looking to invest based on Islamic principles, but also seeking a satisfactory return, and, to an increasing extent, non-Muslims looking to tap into an attractive pool of investment resources.
The development has led to calls for increased regulation and standardisationof Islamic products, with initiatives emerging from a number of authorities.
"The drive towards regulation and standardisation should be treated with caution as prescriptive standards could stifle innovation, while the Islamic community's emphasis on individual understanding and lack of a central authority means that the goal of universally acceptable standards may be difficult to attain.
"Rather, we would advocate the development of principal standards that would leave room for innovation, while increased transparency amongst individual practitioners would enable market participants to make clear judgments about the acceptability of their products," Kronfol said in a recently-released 7-page note.
Diversification
Although the roots of the Islamic finance industry are in banking services, and bank deposits remain by far the largest source of Shariah-compliant assets, other types of assets have become increasingly significant, particularly for the Islamic asset management industry. Shariah-compliant equity funds were an early diversification from the original bank-based business. Takaful, an Islamic product akin to insurance, has been growing in significance, while financial professionals have been investigating ways to bring waqf, or Islamic endowments, currently largely based on property, into the financial mainstream. Perhaps the most dynamic area of development is in Sukuk, commonly referred to as Islamic bonds, an asset type that has been seeing rapid growth, and has tended to be the principal battleground as different financial centres look to take shares of what is seen as a fast-growing market.
At present, Malaysia leads the industry with $164 billion in issued Sukuk in 2014, representing more than 60 per cent of the overall market. London was a distant second with $38 billion and Dubai third with $21.1 billion, with both cities striving to close that gap.
- abdulbasit@khaleejtimes.com
National Tourism Strategy 2031 aims to increase the contribution of the UAE tourism sector to the national GDP to Dh450 billion
business9 hours ago
The Tunisian icon believes tennis still has a way to go to achieve gender equality
tennis9 hours ago
Emirati golfers sweep the top three positions in both team and individual categories with Oman and Saudi finishing with silver and bronze medals
sports9 hours ago
Kane Williamson will captain the T20 World Cup squad for a fourth time as New Zealand hunt for a maiden title
cricket9 hours ago