Unit trust growth opportunities high

20 June 2007 - Rapid per annum growth of the retail investor wealth pool at 45 to 50 per cent across the GCC, due to the region’s hasty advancement towards economic development, has provided a significant market opportunity for Islamic unit trusts to open shop and flourish in the Middle East, Khalid Yousaf, Managing Director of Islamic Finance at International Holdings Group, told Bahrain Tribune at the International Islamic Financial Market Conference yesterday.

“Currently, there comprise of no Islamic investment fund that caters to the needs of the emerging middle class of GCC investors, about 60 per cent of which are expatriates with a substantial amount of money to burn. Despite the presence of numerous Islamic mutual funds, sukuk funds, and the like in the regional market, most of these vehicles require the neglected niche market to deposit minimums of $500,000 – amounts that these clients cannot afford to put forward,” said Yousaf. “This market void represents a viable opening for the establishment of Shariah-compliant Islamic unit trusts that would provide middle class retail investors and also high net worth individuals a low cost and highly diversified alternative to what is now on hand, while limiting stochastic market risks to just 20 per cent.”

Roslan Abdul Razak, Director and Business Advisor of the Islamic Banking and Finance Institute Malaysia, even went further to estimate that the market potential for Shariah-compliant unit trust funds in the GCC is so large that, once established, will guarantee an average subscription rate of 50 per cent for each player.

ohammed Ayman Al Tajer, Director of Financial Institutions Supervision at the Central Bank of Bahrain, explained that the conspicuous market opportunity for Islamic unit trusts in the GCC is also attributable to the absence of pension funds for the region’s expatriates to fall back on coupled with the swift rise of a regulatory framework for these investment vehicles, particularly in the Kingdom.

Reference:: Unit trust growth opportunities high

Islamic Capital &
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