Friday, December 05, 2008

New website on Islamic finance from Al Arabiya; More doubts about the ability of Islamic finance to insulate itself from the credit crisis

The Middle East TV news channel is launching a website devoted to Islamic finance and economics, which will add another source for news on the Islamic finance industry in addition to the few leaders in the GCC region, Zawya and The Times (U.K.) describes Islamic finance and the recent developments, particularly the growing opportunities for people to study Islamic finance at some universities in the U.K.

The Islamic Bank of Britain is looking to the Middle East for additional capital to fund its growth.

A number of practitioners in the Islamic finance industry discuss the industry's development moderated by Dr. Mohamad Nedal Alchaar, the Secretary General of AAOIFI.

In an article that should surprise no one familiar with the Islamic finance industry, future growth depends on increasing the number of Shari'ah scholars according to many including Sheikh Nizam Yaquby.

SEI, a large asset management firm, says that the Islamic finance industry has performed well compared with markets as a whole despite sharp falls in commodities and energy and a rise in the price of financial stocks. By virtue of the Shari'ah screens, Islamic investment funds tend to have very little exposure to financial stocks and more in energy and commodities than most of the indices. Despite doing better than the markets in general, Islamic finance does see repercussions from the credit crisis and global economic slowdown. An article in the Guardian casts doubt on the ability of the Islamic financial industry in the GCC to avoid a crisis similar to the one in conventional markets due to banks' asset-liability maturity mismatches and a falling real estate market accentuated by the illiquidity of credit markets worldwide. The regional head of Citi's Islamic finance in Malaysia discusses the effects of the economic slowdown on Islamic finance.

A Malaysian Shari'ah scholar says that the use of derivatives and options, which are allowed in Malaysia, could create a crisis similar to the one moving through the credit markets in the West.

Singaporean bank OCBC says that non-Muslims are becoming more interested in Islamic banking because it is more conservative than conventional banks which have been struggling because of over-aggressive investment in the real estate market and derivatives relating to mortgage-backed securities.

Malaysia's central bank is going to issue a 37-day sukuk for Ringgit 200 million ($55 million).

1 comment:

Anu said...

I am very glad for your information.