Shariah-compliant market tests perceptions
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Shariah-compliant market tests perceptions

Opinions are divided on quantifying the vastly important market for Shariah-compliant investment products, leaving institutions about how what resources to devote to them.

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Shariah-compliant market tests perceptions

Some remarkable numbers are thrown around about the global Islamic finance industry, though debate rages as to how reliable they are; commonly cited figures are $500 billion in managed assets, and a growth rate of 15–20%, underpinned by almost 300 institutions.

So if that’s the case, why isn’t every international fund manager trying to sell Shariah-compliant versions of their global equity products to high-net-worth people in the Gulf?

It’s one of the complications of this fascinating area. Shariah-compliant investment is clearly of immense importance, but opinion is enormously divided on how to quantify it. At a regional level, it is clearly well entrenched; in Saudi Arabia, 53% of funds, and 72% per cent of assets, are Shariah-compliant. That country alone accounted for 103 Shariah-compliant funds at the end of 2007, according to Tadawul, Saudi Arabia’s stock exchange.

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