DUBAI, 20 February 2007 — The 12th International Islamic Finance Forum (IIFF), to be held at the Jumeirah Beach Hotel on April 2-5, will explore potential strategies for growth and diversification by focusing on a recent research study conducted by international consultancy firm KPMG.
According to the study, a number of key issues were highlighted such as acquisitions in the conventional banking sector, to broaden its access to the estimated 1.5 billion people globally with unprecedented levels of liquidity.
Swati Taneja, conference manager, IIFF, said “given the liquidity generated by the energy wealth in the Middle East, we could soon see an Islamic financial institution seek to acquire a major global player in the conventional financial markets to generate critical mass and acquire market share.”
To put those hydrocarbon riches into perspective, the combined wealth alone of the 300,000 millionaires in the Middle East is estimated to be $1.4 trillion. With Kuwaiti investors currently bidding for Malaysian banks, the creation of an Islamic “mega-bank” is a distinct possibility and underlines the industry’s aspirations to develop a truly global aspect.
“Competition is heating up as large global financial players take on local institutions. That competition is evidence of the worldwide interest the industry has generated,” Taneja added.
Internationally, the sector is enjoying double-digit growth and capturing the attention of non-Muslims, the KPMG study claims. In terms of volume as opposed to value, London has become a major trading center for Islamic funds and a quarter of all Islamic banking business in Malaysia is conducted by non-Muslims. The Central Bank of Malaysia sees non-Muslim investment as the key to future market growth.
Andrew Jackson, chief executive officer, KPMG, Saudi Arabia, who will be presenting a research study at the forum on “Growth And Diversification In Islamic Finance”, said that “to illustrate the rapid growth of the Islamic finance industry, the Bahrain-based Liquidity Management Center had estimated the size of the Sukuk market alone to be worth $18 billion by the first quarter of 2006.” Featured on the IIFF agenda are a number of case studies on recent Sukuk issues, including the Saudi Basic Industries Corporation Sukuk. This was a first in Saudi Arabia, a SR3 billion domestic issue exclusively for Saudi investors. A high profile Sukuk was issued by Nakheel valued at $3.5 billion.