Islamic capital markets to provide major growth stimulus

The United Arab Emirates, Saudi Arabia and Qatar will all increase their global importance as centres of Islamic finance in the coming years, as the three markets experience rising international demand for financing.

Already the top three Islamic banking markets in the Gulf region, rising international demand for infrastructure and investment project financing is likely to stimulate growth in the three markets.

In particular, there is set to be strong demand from the government sector, which is increasingly working to ensure that at least a proportion of large project financing is structured in compliance with Shariah law.

The Islamic banks’ market share in domestic credit increased from 13 per cent in 2006, to 25 per cent at the end of 2012, according to the S&P report.

Global interest in the Islamic financing sector was demonstrated in October 2013, when Britain announced that it would become the first non-Muslim country to sell a bond that can be bought by Islamic investors.

Prime Minister David Cameron said that the UK Treasury is drawing up plans to issue a £200m Sukuk, a form of debt that complies with Islamic financial law.

The new sharia-compliant gilt will enable Britain to become the first non-Muslim country to tap the growing pool of Islamic investments, which is set to exceed USD1 trillion by 2014.

A Euromoney Qatar 2013 Conference will be held under the patronage of Abdullah bin Nasser bin Khalifa Al Thani, Prime Minister, State of Qatar and will discuss models for cooperation and competition.