Sukuk demand to cross $500 billion

20 June 2007 - The demand of sukuk or Islamic bonds stands at $500 billion with total issuance expected to reach $150 billion by 2017, Agil Natt President and CEO, International Centre for Education Centre for Education in Islamic Finance (INCEIF), told the audience at the 2nd International Islamic Financial Market Conference yesterday.

In his presentation titled Islamic Financial Services Industry: The Next Big Wave-Addressing the Human Capital Needs, Agil Natt, said that there were tremendous growth opportunities in Islamic finance with global and local sovereign as well as corporate sukuk market exceeds $50 billion and expected to surpass $150 billion by 2010.

“The diversity in concepts and instruments reflect evolving needs, sophistication and innovations which appeal to both Islamic- and conventional-based investors. These types of instruments are being developed to meet the needs as well as competitive pricing, both important aspects behind the popularity of bonds. Diverse type of Islamic instruments provide issuers and investors as wide choice of selection based on their financing needs, preference and risk profile. The wider acceptance of concepts will create and promote cross-border trading.”

Natt said that the growth of industry would be turned into a sustained one by providing human resources to tap the existing opportunities in the market.

The unprecedented 20 to 30 per cent annual growth in Islamic finance can’t be sustained without the development of human capital. The sustainable growth in this highly dynamic segment of the global economy needs professionals, experts and people with adequate knowledge of Shariah and Islamic finance.

“The growth and appetite for the Islamic finance in the global market is a proof of the high level of acceptance in the West, where people may not see the Islamic products purely on the basis of the religion but the products backed by transparency and ethics.

“There is very clear difference among Islamic banking and finance as the business in this sector is not based on speculation rather it is backed by ethics and set of rules based on transparency. The recent surveys show that the products designed and developed on ‘values’ and ‘ethics’ are equally popular among the non-Muslim client base. This is a success story what we call the renaissance of Islam.”

Reference:: Sukuk demand to cross $500 billion

Islamic Capital &
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