S&P Report Sees Double-Digit Growth And A Regulatory Push For Islamic Finance In 2014

LONDON/DUBAI (Standard & Poor’s) Nov. 28, 2013.

Global growth of the Islamic finance market has continued unabated this year, undeterred by the uncertain recovery elsewhere in the world’s financial markets, Standard & Poor’s said in a report published today, “Islamic Finance 2014:

S&P Report Sees Double-Digit Growth And A Regulatory Push For Islamic Finance In 2014

S&P Report Sees Double-Digit Growth And A Regulatory Push For Islamic Finance In 2014

We Expect Continued Double-Digit Growth, And A Push For Regulation And Standards.”

“We believe that worldwide, Sharia-compliant assets–which we estimate at upward of $1.4 trillion–are likely to sustain double-digit growth in the coming two to three years,” said Zeynep Holmes, Regional Head of Eastern Europe, Middle East & Africa at Standard & Poor’s.

Despite more than a decade of heady growth, the industry is still in a formative stage. But we believe it’s only a matter of time before it achieves critical mass, as the pool of assets broadens and deepens, and enhances liquidity.

“Nevertheless, the speed at which the industry matures and joins the mainstream comes down to how market participants address a classic imbalance between supply and demand,” said Ms. Holmes.

Islamic finance remains a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centers and their various regulatory frameworks. In our view, expansion and enhancement of existing centers, and a more transparent regulatory environment could build the momentum for the growth needed to break into the mainstream.

We believe that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take center stage starting in 2014. Interestingly, newcomers in the industry–such as Oman, Turkey, and Nigeria, for instance–have started to trace the footsteps of fast-growing pioneers, such as Malaysia. Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront.

“The gradual building out of local and regional regulatory frameworks and establishment of standards ought, in our opinion, to minimize the barriers that are preventing the industry from achieving its full potential. Globally accepted standards, we believe, are necessary for growth of the industry,” Ms. Holmes said.

In this respect, we believe that the two regional heavyweights and pioneers of the industry–Asia (most notably Malaysia) and the Gulf Cooperation Council (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates)–are set to lead the way. Aspiring regional champions, such as Turkey, may also help foster a more systematic approach to channeling and shaping growth in Islamic finance.

-Ends-

Standard & Poor’s Ratings Services, part of McGraw Hill Financial (NYSE: MHFI), 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.

If you do not wish to receive any more promotional e-mails from Standard & Poor’s, please email [email protected]

Media Contact:
Dhanya Isaac
Weber Shandwick MENA
Tel: +971 (0) 445 42 22;
e-mail: [email protected]

© Press Release 2013

© Copyright Zawya. All Rights Reserved.

http://www.zawya.com/story/SP_Report_Sees_DoubleDigit_Growth_And_A_Regulatory_Push_For_Islamic_Finance_In_2014-ZAWYA20131128111521/

Leave a Reply