Why Is Islamic Financing Relevant?

Transcription

1. Why is the Islamic Financing Relevant ? Middle East and Asia Liquidity —  With the exponential growth in Islamic assets across the world, and particularly the Middle East (ME), Islamic banking liquidity have become and remain increasingly important —  ME Islamic Financial Institutions (IFI) have been exposed to global financial markets however better economic conditions, higher oil prices, and active government involvement to weather economic and financial crisis are showing high level of protectionism —  IFI felt the repercussions less because Sharia law prohibits interest-based financial products and the ME remains one of the most capital surplus region of the world —  Islamic Banking represents c. 20% of banking system in the GCC states and c.15%(1) of banking system in Asia Middle East/Asia Liquidity Sukuk Structure Islamic Liquidity Accessing Liquidity Pool Islamic Finance Market Incremental Pool Diversify Funding —  While spreads have widened, the Middle East still represents a deep, stable demand pool —  More and more global issuers (GECC, Petronas) are considering Islamic financing to access this market and diversify their investor base —  Structuring an Issue Islamically is the most inclusive way of tapping the Islamic market —  Both Islamic and conventional banks can and do participate in Islamic transactions Execution and Pricing —  Islamic structures have become standardized – with costs and time to market comparable to conventional facilities/ issues —  Sukuk issues priced in line with conventional instrument (1) Zawya.