Asset management, sukuk to spur growth in Islamic finance
The US$2 trillion Islamic finance industry has grown rapidly over the past decade fueled in part by a robust sukuk market and a growing Islamic asset management industry.
Going forward, Islamic finance is expected to grow further in response to expanding economies in countries with a growing Muslim population and amid increasing demand for Shariah-compliant investments.
Islamic finance will be in the spotlight as The Asset, in partnership with Indonesia’s Ministry of Finance, kicks off its Islamic Finance Summit on Thursday, February 18 in the bustling city of Jakarta.
Keynote speakers include top officials at the ministry including the minister of finance, Indonesia Bambang Brodjonegoro and director general of budget financing and risk management Robert Pakpahan.
The past decade has been eventful for Islamic finance with the rise of sukuk issuances and the emergence of Islamic banking and asset management. The summit will discuss highlights of the past year as well as offer glimpses of what’s ahead.
Participants of the summit will also hear Indonesia’s plans for developing Islamic finance. A frequent sovereign sukuk issuer, Indonesia has much room to grow in the corporate sukuk space. As the country maps out a plan to boost Islamic finance, the government is expected to undertake a consolidation of its Islamic banking sector and the development of corporate bond issuances. In the eight years to 2015, the country’s corporate sukuk industry grew only by US$1 billion from US$0.4 billion in 2008.
Islamic asset management, which has seen a rise in stature over the last several years, will be a focus in the summit. Demand for Shariah-compliant products is strong, driven by a growing wealthy Muslim population and the renewed interest from pension and sovereign wealth funds. Islamic finance’s role in SRI (socially responsible investing) will also be examined. While they have developed in silos in the last decade, there exists a common ground between them. Increasingly, Islamic finance will play an important part in boosting socially-responsible investing.
Last year, the International Finance Facility for Immunisation Company (IFFIm) issued its second sukuk raising US$200 million for the immunization of children in some of the world’s poorest countries. IFFIm’s inaugural sukuk issuance of US$500 million in 2014 was named “Best sukuk for social good” by The Asset. Currently the Islamic funds industry is valued at more than US$60 billion and is widely predicted to continue to grow in size.
Event participants will also have a chance to interact and learn from Islamic finance professionals on what needs to be accomplished to grow the industry.
Be sure to check out updates on our events and Twitter page where we will be reporting on developments at the summit. To view our live site please click here.
18 Feb 2016