This article is a version of misinformation since it promotes sukkuk as success stories, given the obvious meltdown due to the other stories about sukkuk – this is just a standard pro-SCF puff piece but should be understood as disinformation and failure to disclose, given the actual risks now known throughout SCF world on sukkuk.

Islamic Banking
Islamic banking is steadily moving into the mainstream of conventional financial systems and has remained largely insulated from the global credit crisis. It is expanding not only in the Muslim world, but also in other countries where Muslims are a minority, notably Britain, France, the US and even Japan. The industry has grown at a prodigious rate of 15-20% annually over the past decade; a trend that is likely to continue as the economic and construction boom in the Middle East and Asia regions will boost the value of Shariah assets.


There are now over 300 Islamic financial institutions (IFIs) spread over 75 countries and 300 Shariah-complaint mutual funds, whereas, just one Egyptian-based Islamic bank existed in 1975. Currently, about $800bn is deposited in Islamic banks, mutual funds, insurance schemes and Islamic branches (windows) of conventional banks. By contrast, the market was valued at only $140bn in 2000. McKinsey & Co, the business consultants, estimates Islamic financial assets could reach $1 trillion by 2010. Moody’s Investors Service, the ratings agency, is very bullish, predicting that a relatively young industry could boast worldwide assets of $4 trillion within five years. It notes: “Oil is creating liquidity and wealth through profits for companies and salaries for individuals. This finds its way through to the banks, whether it is in Shariah-compliant personal loans or from investors wanting to buy Sukuk bonds. A booming and profitable market attracts entrants because excess demand needs to meet additional supply.”

 

 

http://www.africasia.com/themiddleeast/me.php?ID=1973

 

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