The United Arab Emirates needs a centralized body for the Islamic finance industry to help develop its sukuk market further, a top central bank official said on Wednesday.

Saif al-Shamsi, assistant governor for monetary policy and financial stability, said the law calls for a central sharia committee at the federal level that would work with sharia boards at the corporate level but that has not been implemented yet federally. 

Dubai Islamic Bank (DIB) has mandated five banks for an Islamic bond, or sukuk, due to be issued at the end of May, three sources familiar with the matter told Reuters on Tuesday. The lender has picked HSBC, National Bank of Abu Dhabi, Emirates NBD, Deutsche Bank and itself for the deal, the sources said, requesting anonymity.

One of the sources added the sukuk was likely to be a benchmark-sized, five-year issue. Benchmark usually means at least $500 million.

On a recent sunny day, Eric Swats, a fund manager at Rasmala Investments, sat under a parasol at a restaurant on the terrace of the Dubai International Finance Center, talking up his new $25 million Rasmala Global Sukuk Fund.

Mr. Swats hopes it will tap into fast-growing demand from Middle Eastern and Asian investors for sukuk, securities that comply with Islamic law. “The market for conservative and well-managed” Islamic finance products is “underserved and underdeveloped,” he said over a lunch of salad and fruit juice.

Traditionally, Islamic banks have outperformed their conventional peers in most markets. However, a closer look suggests the market dynamics are changing, demonstrating a new trend. Two key indicators are cause for reflection: slowing growth rates and eroding profitability, A.T. Kearney, a global management consultancy, said Monday.

Declining growth rates are occurring in key geographies including Saudi Arabia, Bahrain and the UAE, where growth rates have dropped to between 3 and 8 percent from double-digit figures. In parallel cost income ratios are increasing in most markets, putting pressure on profitability.

Global Islamic insurance sales rose nearly 20 per cent to US$8.3 billion (Dh30.48bn) in 2010, but opportunities still abound for further expansion, a new report has found.

Takaful contributions in the UAE grew by 28 per cent to reach $818 million during the year, said Ernst & Young's World Takaful Report 2012.

Over the past decade, Islamic finance has gained visibility especially with the ongoing financial crises, making the general public curious about its functionality and how it withstood the pressures of the global meltdown.

Hawkamah, in its recently launched Policy Brief on Corporate Governance for Islamic banks and Financial Institutions, identified a knowledge gap concerning Sharia-compliant finance, which needs to be addressed as Islamic finance enters mainstream finance.

With an estimated value of around $1.1trn in global assets, Islamic finance has maintained continuous growth against the backdrop of global economic turmoil across many of the conventional world markets. Yet while their inherent conservatism and overweight exposure to low risk investment has proven a strong point for Islamic-compliant financing of real estate, as safer investments have generally out-performed the market, the ongoing lag in Shari’a rules harmonisation is threatening to stifle their full potential in the Middle East and Islamic Asia, reflects Mark Faithfull.

Global Islamic insurance contributions surged 19 percent in 2010 to $8.3 billion helped by Saudi Arabia, the world’s biggest oil exporter, which made up more than half the industry, an Ernst & Young report said.

The six-nation Gulf Cooperation Council, which also includes the United Arab Emirates, Qatar, Bahrain, Oman and Kuwait, made $5.68 billion of Islamic insurance or takaful contributions in 2010, and South East Asia $2 billion, according to the World Takaful Report 2012 e-mailed today.

James Caan made his millions in the recruitment and headhunting business and his claim to fame was his starring role as part of a BBC show which strived to find the latest and hottest new business models.

As a result, he is an expert at delivering the perfect pitch and getting his message across. In the Gulf to announce his latest move into the world of Islamic finance, it soon becomes clear Caan knows exactly how to combine his latest business campaign with some headline grabbing soundbites.