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Islamic Funds and Investments Market Must Achieve Critical Mass at Global Scale for Long Term Success

The 7th Annual World Islamic Funds and Financial Markets Conference 2011 Tackles Key Growth Challenges as the Islamic Asset Management Industry Seeks to Expand its Geographic Footprint

Manama, Bahrain: 26^th September 2011: The 7^th Annual World Islamic Funds and Financial Markets Conference (WIFFMC 2011) which opened today at the Gulf International Convention and Exhibition Centre, Gulf Hotel, Bahrain, saw more than 400 leaders in the international Shari'ah-compliant funds and investments industry engage in critical discussions that focused on developing forward-thinking strategies to get the industry back on the high-growth track, achieve critical mass, and adapt to the new global economic landscape.

Held under the strategic partnership of the Central Bank of Bahrain , the two day event was inaugurated today by a special opening keynote address by Abdul Rahman Mohammed Al Baker, Executive Director - Financial Institutions Supervision at the Central Bank of Bahrain , who provided insights on enabling growth and creating a deep and vibrant Islamic investment market.

The inaugural keynote address was immediately followed by a special international plenary session led by Germain Birgen, Chairman - LFF Islamic Finance Task Force, Chairman - ALFI Islamic Finance & ME Working Group, Managing Director - Global Head HSBC Amanah Securities Services - HSBC Securities Services (Luxembourg) S.A.; and Gary Palmer, Chief Executive, Irish Funds Industry Association (IFIA). The session assessed select jurisdictions that have exciting growth potential for Islamic funds and investments.

Addressing the media at the event, David McLean, Managing Director of the World Islamic Funds and Financial Markets Conference said that "Financial centres across the globe are vying to become 'domiciles of choice' for Islamic funds. With many new international markets now opening their doors to Islamic finance and investments combined with the increasing internationalisation of large-scale transactions, it is essential to understand the rapid development of the most dynamic regions and build a deeper relationship between the key markets - so that leading institutions are better placed to compete on a global scale."

A key highlight of the 7th Annual World Islamic Funds and Financial Markets (WIFFMC 2011) was the exclusive CEO & Industry Leaders Power Debate session led by internationally respected CEOs and industry leaders. The session featuring Oscar Silva, Chief Executive Officer of Global Banking Corporation B.S.C. (c) (GBCORP); Moinuddin Malim, Chief Executive Officer of Mashreq Al Islami; Geert Bossuyt, Chief Executive Officer of Dar Al Istithmar; Dr. Salah Addeen A Qadar Saeed, General Manager - Credit & Risk Management at Bahrain Islamic Bank; Samad Sirohey, Chief Executive Officer of Citi Islamic Investment Bank; and Fadi Salim Al Faqih, General Manager of Bank of Khartoum analyzed and discussed new strategies for re-igniting growth in Islamic financial markets. The session also assessed the internationalization of the Islamic investments market and addressed key challenges of aligning business strategies with the new economic realities.

The eagerly anticipated 2011 edition of the Ernst & Young Islamic Funds and Investments Report (IFIR 2011) was also launched at the event. The Report developed in collaboration with Ernst & Young, was presented at a specially convened session at the conference. With a principal theme of "Achieving Growth in Challenging Times", the Report indicated that "after three flat years, the global Islamic fund management industry expanded by 7.6% in 2010, reaching US$ 58 billion in Assets under Management (AuM), 13% higher than 2008." The Report also indicated that this growth is however largely due to market performance and only partially on account of new money flows. The Report also pointed out that the "over dependence on a few institutional investors is a key structural weakness in Islamic investments markets globally and that achieving scale is even more critical to ensure long term sustainability for the Islamic funds industry worldwide and over 70% of fund managers fall below the estimated break-even AuM level of US$ 100 million."

Assessing the global economic outlook and its impact on the performance of Islamic funds, Dr. Jarmo Kotilaine, Chief Economist at the National Commercial Bank said that "after a brief setback in 2010, the GCC region is witnessing increased activity in the sukuk market. Driven by favorable demography and infrastructure development needs, economic activity is rising again in the GCC economies and major investments and fund raising are done through sukuk issuance. Funds raised through sukuk in GCC in 2011 has reached 38% (USD17bn) of global issuance till September 2011, which was only 28% (USD7.6bn) and 22% (USD6.1bn) in 2009 and 2010, respectively."

He also said that the "corporate sukuk issuance revived in 2011 accounting for around 87% (USD14.6bn) of total issuance as compared to 77% (USD4.6bn) of total issue in 2010."

The World Islamic Funds and Financial Markets Exhibition, which was held along the sidelines of the conference, showcased the latest products, services and innovations from over 25 exhibitors.

Commenting on their participation at the event, Aderi Adnan, Islamic Finance and Banking Advisor at Labuan IBFC said that "Islamic Financial services is a long standing pillar of Labuan IBFC, in fact the first Labuan Sukuk was issued in 2001 and today over USD5 billion flows through the island's Islamic financial system. With the passing of the Labuan Islamic Financial Services and Securities Act 2010, the world's first omnibus legislation governing all Islamic business, we are gaining even further ground. Participating in the World Islamic Funds and Financial Markets Conference and other Islamic conferences organised by MegaEvents is an ideal platform for us to network and share with industry leaders development in Labuan IBFC".

A similar view was expressed by Cassim Docrat, Director of DDCAP (DIFC) Limited who said that "our support of the Annual World Islamic Funds & Financial Markets Conference as a Gold Strategic Sponsor, once again reinforces our commitment to the growth and development of the Islamic financial services industry. Hence we are delighted to participate in this year's event in Bahrain which has been at the forefront in the evolution of Islamic Capital markets in the region and beyond."

Jamal Hijres, Chief Executive Officer of Capinnova Investment Bank was earlier quoted saying that "we at Capinnova Investment Bank are delighted to be the 'Gold Strategic Partners' for the 7th Annual World Islamic Funds and Financial Markets Conference in Bahrain. We are confident about the Islamic finance industry's future and Bahrain will continue to be one of the leading financial centres in the region due to the efficient regulatory policies adopted by the sector. A platform such as this enables the top experts in the industry to come together and propel the industry forward. Bahrain remains a popular destination for foreign investors on account of its established regulatory practices, transparency and adherence to international standards. There are several opportunities to be tapped within the country to secure good returns and long-term sustainability and forums such as this will ensure that we capitalize on these opportunities."

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© Press Release 2011