The recently released report “State of the Global Islamic Economy” commissioned by Dubai Islamic Economy Development Center and produced by business intelligence provider Thomson Reuters is highlighting a lot of new trends in the Islamic economy, including East Asian countries enabling their domestic markets to tap into Islamic financing, new developments in halal food and tourism, as well as in clothing and fashion and in pharmaceuticals and cosmetics.
The Malaysian government plans to roll out a new sharia-compliant investment platform next year, aiming to broaden the traditional role of Islamic banks from credit provider to investment intermediary. The government is backing the Investment Account Platform (IAP) with an initial start-up fund of 150 million ringgit ($45 million), intending that the IAP will serve as a central marketplace to finance small and medium-sized businesses.
As Dubai aspires to become the global hub for Islamic economy, Islamic banking and Islamic capital markets are expected to grow simultaneously, said Adnan Chilwan, CEO of Dubai Islamic Bank. Clearly Islamic capital markets are relatively new phenomena. Earlier it was much simpler that if someone needed finance they would go to a bank and the bank would leverage its balance sheet and give a loan. Then it started becoming a little more sophisticated by many banks joining in together to do a syndicated deals. Then a stage came where banks started to participate in cross border deals.
Most advisors don’t have to choose between respecting clients’ religious beliefs and maximizing their wealth. But sometimes a situation comes up where faith and finance intersect. Some religions forbid adherents from making certain types of investments; others require that believers set aside a portion of income for charity or to support their organization. Advisors who have handled such situations say that doing so with grace and creativity can earn unusually deep client loyalty — or even turn prospects into clients.
Given the increasing importance of Islamic banking and finance in Pakistan, it is important to deepen the Islamic financial market in the country.
One way of doing so is by developing a market for Islamic hedging instruments, which are known as derivative contracts in conventional finance. It is, however, important to understand the difference between Islamic derivatives and their conventional counterparts.
There is no doubt that Islamic banking and finance must always fulfil the requirements of Islamic jurisprudence. However, it is increasingly being felt that Islamic banking must go beyond the law and imbue the ethical spirit of Islam to remain relevant to the needs of Muslim communities around the world.
The concept of Islamic finance, banking and economics has gained tremendous popularity of late. It is appreciated and implemented not only in countries where Islam is the dominant religion, but also in non-Islamic nations. The basic premise of Islamic finance, banking and economics is based on ‘hygienic’ ways of doing business as prescribed by the Islamic Law or Shariah.
Failaka Islamic Fund Awards recognise Saudi Arabian and Malaysian funds for outstanding performance in 2009.