The domestic Islamic finance markets of Malaysia and the Gulf region have not escaped the global financial crisis. However, the current environment has prompted players from these sectors to look more closely at Western economies, according to published reports on Reuters' Islamic Banking and Finance Summit held in Dubai over the weekend.
Speakers at the summit said that this shift in thinking is reflected in sovereign wealth funds beginning to inject cash into global financial centers to further Islamic finance, the published reports stated.
The current market has also provided scholars, lawmakers and bankers some time to readdress the Sukuk structure. The Gulf Arab region saw no Sukuk issues in 1Q09, although this is expected to change.
According to Reuters, demand from the world's 1.3 billion Muslims for investments that comply with their beliefs has soared. Furthermore, assets that comply with Islamic law range between $700 million and $1 trillion, with some projections seeing assets growing to $1.6 trillion by 2012.
However, the industry needs to diversify from property loans and ordinary lending to include advanced treasury services, innovative asset management, and balance sheet and securitization management, experts from management consulting firm Oliver Wyman said last week.
"This will allow them to address needs of underserved market segments such as Islamic financial institutions, corporates, sovereign wealth funds and private wealth clients," they said.