Dubai Leads World In Islamic Finance

by Phillip Morton, Investors Offshore.com

11 September 2007

As a pioneer of modern-day Islamic Finance, Dubai is perhaps the world's leading centre for the nascent industry, thanks to its location within the Muslim world and its position between the financial centres of East and West, according to the Governor of the Dubai International Financial Centre (DIFC), Dr Omar bin Sulaiman.

In his opening address to the Islamic Finance Summit hosted by The Economist in Geneva, Switzerland, last week, bin Sulaiman suggested that: “(The) DIFC in particular, is helping to spur creativity, originality and development by leading through example. Within Dubai this helps create a dynamic atmosphere, which in turn attracts both the financial and human capital that, in its turn, generates further innovation."

With approximately 1.6 billion Muslims around the world, and the global market for Islamic financial services currently estimated at almost $250 billion worth of assets, this sector has also appealed to non-Muslim and ethical investors. Boasting an annual growth rate of around 15%, Islamic finance has moved from a niche market to a mainstream business, and is now attracting attention from global financial institutions.

According to the DIFC,Dubai’s role in this shift has been significant, as it is ideally located within the Muslim world and between existing financial centres in the West and in the East. In its ambition to promote and develop Islamic financial services, the DIFC has embarked on a number of initiatives: it has established the Islamic Finance Advisory Council, which plays a key strategic role in providing advice on Islamic finance and in helping the development of the industry; and the Dubai International Financial Exchange (DIFX) has also been recognised for becoming the world’s largest exchange for sukuk in terms of value, with eleven issues totalling more than $13 billion.

The one-day conference, entitled: 'The financing alternative: from niche market to mainstream business' was aimed at banks, asset managers and investment companies, focusing on the legal framework underpinning the Islamic financial services sector, and highlighting opportunities and benefits for the entire economy, as well as for individual investors.

The line-up for the summit consisted of several high-level international speakers, including: Mohammed Abdel-Haq, Managing Director of HSBC Amanah Private Banking; Uto Baader, CEO of Baader Wertpapierhandelsbank AG; Nadim Khan, Partner at Herbert Smith LLP; and Dr. Humayon Dar, Managing Director of Dar Al Istithmar.

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