Just when many of the world’s financial systems have been working to weather the capital market turmoil and its spread to economies around the globe, Islamic finance growth has stayed strong and will likely be brisk during the next year.
“We believe Islamic finance has become a recognized and a specific segment of finance on its own with still-bright growth prospects,” Standard & Poor’s credit analyst Mohamed Damak said on Monday, Feb 1.
“We think Islamic finance is set to make further inroads in developed Western markets while Southeast Asian countries will likely fuel the Islamic finance advance in Asia in 2010.”
His comments were contained in the ratings agency’s report “Islamic finance is likely to advance in 2010 on firm growth and widening geographic reach,” published today on RatingsDirect.
However, S&P said at the same time, though, there are a number of important questions for which the answers are not necessarily yet clear but that may play a part in shaping the sector’s future growth.
Specifically in non-Muslim countries, and especially in Europe, S&P considers they include the size of demand for Sharia-compliant products, regulatory and tax environments, the support of the political and financial communities, sovereign sukuk issuance, and the possibility of a common strategy for extending Islamic finance across EU countries.
Assets of the top 500 Islamic banks expanded 28.6% to total US$822 billion at year-end 2009, compared with US$639 billion at the end of 2008, according to publicly available information.
source : theedge