CHAPTER 1
The Growth of Shariah Investments
Preparing the Next Generation
Permissibility is the original state.
INTRODUCTION
When I was a speaker at the Islamic Finance News (IFN) Europe Conference in London in June 2011, a young European participant asked, “Why would Japan join the bandwagon and issue Sukuk when it does not have a sizable Muslim population?” I explained that whilst Japan itself has ample liquidity, its involvement in Islamic finance is to show the world that the Japanese remain relevant and innovative and are able to grant value to investors with the latest investment trend. We have seen AEON Credit Services and Nomura Holdings issue Sukuk (Islamic bond) in 2007 and 2010, respectively, and Daiwa Asset listed its first Islamic ETF in Singapore in 2008.
What is being done by Japan is reflective of active market players envisioning that over the next 10 years, the landscape of institutions offering Islamic financial services, including banks, nonbanks and microfinance institutions, Takaful (insurance), Re-Takaful operators, and capital market players, will evolve into a full-fledged system of Islamic financial services that coexist effectively and efficiently with conventional financial institutions.
The rapid pace of economic growth and the accumulation of wealth in the Middle East and among the Muslim populations of the Far East are the catalysts that have driven and stimulated the developments in Islamic asset and wealth management. ...
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