testwow

Global Islamic Finance Set to Double by 2015, Says Standard & Poor’s

DUBAI (Standard & Poor’s) 20 September, 2012 – Global Islamic Finance is set to double in size between 2011 and 2015 with the sector increasingly viewed as a real alternative to conventional finance, according to Standard & Poor’s (S&P). The global prospects for the Islamic Finance industry will be the subject of a conference to be hosted by S&P in Dubai on 25 September, 2012.
Stuart Anderson, Managing Director & Regional Head, Middle East at Standard & Poor’s said: “The global crisis faced by conventional finance has led to Islamic Finance increasingly being viewed as a credible alternative. Issuers and investors have realised that the risk-reward balance in both conventional and Islamic Finance are not fundamentally different.” S&P expects the $1 trillion global Islamic Finance industry to grow 20% over 2011-2015, doubling in size over the period.

Titled ‘The Globalisation of Islamic Finance: Connecting the GCC with Asia and Beyond’, S&P’s Islamic Finance conference will explore how enhanced links between GCC and Asia can drive greater convergence and globalization in the industry. Other key subjects that will be discussed at the event include the prospects for Islamic banks in the GCC when compared to their Asian counterparts; the varying applications of Takaful in Asia and GCC; and how greater use of sukuk can boost GCC and Asian economies.

According to S&P, Islamic Finance growth is currently led by countries in the GCC and Asia, which represent half of the global industry. Young, fast-growing Muslim populations; robust macroeconomic environments; and large infrastructure projects that require financing are the main drivers of this increasing growth. Malaysia leads the global industry while Saudi Arabia leads in the GCC.
Over the last few years, the industry has taken major strides to achieve a broader consensus on Islamic banking structures. “We have also seen stronger and more active support from domestic authorities, particularly through the creation of regulatory and tax frameworks, ensuring a level playing field between conventional and Islamic instruments,” said Anderson.

A key development expected to drive globalisation and expansion of Islamic banking outside Asia and the GCC is the increasing attractiveness of sukuk among global investors. At a time when conventional banks’ appetite for term loans is declining, S&P believes that sukuk could become a key funding source. Sukuk issuance looks set to cross the $100 billion threshold in September 2012, and is projected by S&P to grow 25% over 2012-2015 to reach about $200 billion a year in 2015. Malaysia, Indonesia, and the GCC are expected to account for a combined 85%-90% of issuance mainly to finance infrastructure-related projects.
This year, new GCC issuance (as of September 17, 2012) has totalled $19.9 billion across all asset classes compared with $19.4 billion of new issuance in all of 2011. Asia, meanwhile, has seen sukuk issuance worth $57.9 billion year-to-date, compared with $64.9 billion in 2011. In terms of number of issuances this year, the GCC has accounted for about 50 and Asia for 430 issuances (as of September 17, 2012) compared with 44 and 437, respectively, for 2011.

A key theme at S&P’s Islamic Finance event will be increasing cross-border transactions between GCC and Asian Islamic Finance markets. A recent S&P report sees growing infrastructure sukuk issuances by GCC companies in Malaysian ringgit providing a significant impetus to the development and globalization of the sukuk market.

S&P rates four of the 10-largest Islamic banks worldwide, including the top two. It added Qatar Islamic Bank (A-/Stable/A-2) to its coverage in April 2012.

Led by Dominic Crawley, Global Practice Leader for Financial Services, S&P analysts from the Middle East, Europe and Asia will speak at the Islamic Finance conference to be hosted by the organisation on 25 September. In addition, a guest keynote speaker and a panel of senior Islamic Finance industry participants will share their perspectives on the future direction of the market.

Standard & Poor’s Ratings Services, part of The McGraw-Hill Companies (NYSE:MHP), is the world’s leading provider of independent credit risk research and benchmarks. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,400 credit analysts in 23 countries, and more than 150 years’ experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information and independent benchmarks that help to support the growth of transparent, liquid debt markets worldwide.

Copyright © 2012 by Standard & Poor’s Financial Services LLC S&P. All rights reserved.

No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P’s public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Australia – Standard & Poor’s (Australia) Pty. Ltd. holds Australian financial services licence number 337565 under the Corporations Act 2001. Standard & Poor’s credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).

STANDARD & POOR’S, S&P, GLOBAL CREDIT PORTAL and RATINGSDIRECT are registered trademarks of Standard & Poor’s Financial Services LLC.

Press Release 2012,Sep 20 2012

http://www.zawya.com/