Islamic funds industry in for an upswing (By IFN)

GLOBAL: With banks such as Standard Chartered and CIMB recently announcing a new push for Islamic private banking and wealth management, it appears that the rest of the sector’s stakeholders are coming together in a move that could prove to be a turning point for the Islamic funds market.

One of the crucial developments that could provide a new impetus for the market has emerged in the UAE, where the Securities and Commodities Authority (SCA) launched a new system for investment funds aimed at attracting fresh investments and creating more stability in the emirates’ financial market.

The new framework covers definitions, systems and rules for setting up investment funds and promoting them; with the SCA Resolution No. 37 of 2012 governing the investment funds set out in four chapters overseeing local funds, investment fund service providers, the promotion of foreign funds inside the UAE; and final provisions including provisions of investment funds of special nature, offences and penalties and fees.

Meanwhile, Franklin Templeton Investments is set to debut its Shariah compliant funds, with plans to offer three Sukuk and stock investment vehicles out of Luxembourg this year; and Malaysia’s AmIslamic Funds Management just launched a new ringgit-denominated global Sukuk fund.

A recent initiative by Malaysia’s government to allow private retirement schemes is also expected to open up room for the Islamic funds market, as fund managers offer Shariah compliant alternatives as part of the private pension plans.

The UK Islamic Finance Secretariat has estimated that the Islamic funds industry grew to US$60 billion in 2011; while Malek Khodr Temsah, the vice-president of treasury and investment at Albaraka Banking Group is reported as saying that he expects the industry to grow between 7.5-10% this year.

With wealth controlled by Muslims growing rapidly and in some cases outpacing growth seen in conventional markets; and an increasingly conducive regulatory and product-driven environment, the Islamic funds industry could just be in for an upswing.

See: http://redmoney.newsweaver.co.uk/1hrxa9l6mdph38rwoni3wx?email=true&a=6&p=26243885&t=21740705