Islamic finance assets will grow at a rate of between 20 to 25 per cent in the Gulf by 2010, as their global worth soars to about $1.4 trillion (Dh5.14trn).
Dr Hatim Tahir, head of training at Dubai International Financial Exchange Academy, told the two-day International Ras Al Khaimah Family Office and Investment Summit yesterday that more than $29 billion worth of recent sukuk (Islamic bond) issuances by corporates in Saudi Arabia, the UAE and Qatar highlights the rise of the region’s Islamic debt capital market.
He said more than 300 Islamic financial institutions are operating around the world that manage assets worth $900bn out of which about 30 per cent are in the GCC region.
Addressing delegates on the first day of the summit sponsored by the Ras Al Khaimah Free Trade Zone Authority, Dr Tahir said recent sukuk issuance in the UAE, which totalled more than $18bn, is a powerful indicator that the Shariah-compliant securitisation of the debt capital market is growing rapidly in the GCC.
The latest offerings were the $1bn Sukuk Trust Certificate Program launched by Emirates Islamic Bank, the $210 million asset-backed issuance of notes on behalf of UAE real estate finance provider Tamweel, and the $300m Sukuk Al Mudarabah issued on behalf of Qatar Real Estate Investment Company (Alaqaria).
These sukuk followed three recent Saudi corporate issuances – the SAR5bn (Dh4.9bn) Saudi Basic Industries Corporation (Sabic) issue, the SAR5bn Saudi Electricity Company issue and the $1bn Dar Al Arkan Real Estate Development Company issuance.
Dr Tahir said Saudi Arabia, the UAE, Bahrain, Kuwait and Qatar have emerged as key players in Islamic financing alongside Malaysia, Indonesia, Brunei, Sudan, Iran, Pakistan, Bangladesh and Egypt.
A healthy financial and economic outlook for the GCC is based on banks enjoying sustained regional economic growth, high oil prices fuelled by economic incentives and investment legislations, new investment laws and land registry reforms, and demographic change boosted by real estate development, he said.
Islamic assets set for 25% growth by 2010