Time to seek out investment opportunities

As market conditions improve, the Islamic finance industry should actively seek out investment opportunities in distressed assets, the director of a Bahrain-based Shariah-compliant investment bank said.

"The 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 Shariah-compliant products and investments.

"This is a time to seek out distressed investment opportunities," Hasan Habib Hasan, Executive Director of Treasury and Financial Institutions at Capivest said in a statement.

"In 2009, international and regional investors, looking for appropriate returns with capital protection and with a long-term view of the market, will require Shariah-compliant investment opportunities that meet their investment needs. If we are now seeing the first signs of recovery, Bahrain and the Islamic financial industry must make sure that it is ready to capitalise on this," Hasan said.

An issue limiting the growth of Islamic investment products in the past has been a perceived lack of visibility of the potential return. "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," he said.

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."

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