13 January 2011
BEIRUT: Central Bank Governor Riad Salameh Wednesday called for better indexing of Islamic stocks at an Islamic finance seminar Wednesday.
“As the Islamic capital markets grow in sophistication, they will attract more international investors looking for enhanced returns and diversification opportunities,” said Salameh.
“Islamic indices will be present to assist investors and increase potential for further investments in the Islamic Equities and Sukuk markets alike,” Salameh added.
An international standard-setting body for Islamic financial services, International Financial Services Board, hosted the seminar in conjunction with the Lebanese Central Bank and international information group Thomson Reuters.
The seminar dealt with indexing processes and delved into the subject of Shariah Screening in stocks assessment.
Salameh said that Islamic finance benchmarks, such as those provided by the Islamic bond index, would greatly enhance Islamic capital markets.
He said that the absence of Islamic financing prior to its conception in 1987 kept “the majority of Muslim investors” away from the stock market.
Islamic banking in Lebanon did not make an impressive growth in Lebanon although they have been present in the country for more than eight years.
Experts estimate total assets of Islamic banks in Lebanon at less than 2 percent of the total bank assets.
According to the Kuwait Finance House (KFH), Sukuk, or Islamic bonds, issuance stood at $27.9 billion in the first nine months of 2010, up 62.3 percent from the same period of the previous year.
The KFH report said that the Sukuk market in 2011 would show recovery from the international credit crisis period which dealt the market a significant blow.
Islamic banks operating in Lebanon have not yet been able to launch a Sukuk amid reports that the Lebanese market may not be too receptive to this type of issue. – The Daily Star
Copyright The Daily Star 2011.
