How should the Islamic finance Industry tackle the new entrant: Headline Risks

Sukuk and conventional financing share the same features that could make them vulnerable to global factors. One thing to note is that international investors should consider economic fundamentals over the headline risks that spur from the Middle East. In Middle East, active portfolio managers, who are on the ground and manage sukuk portfolios, would tend to benefit more than the passive ones (this is due to the fact most new investors to our region can be easily moved by negative sentiments and geopolitical risk). And when that happens, we can see “smart money” coming in and picking up certain GCC Sukuk at great value. Indeed, Islamic finance investors should value fundamentals over the headline risks.

Such “great values” can also been seen in th...