The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets

Chapter 25SingaporeAn International Hypermarket of Financial Products

Lee Ka Sing

Head, Debt Capital Markets, Maybank Kim Eng Securities Pte. Ltd.

Ian Yeo Tian Chiang

Senior Associate, Debt Capital Markets, Maybank Kim Eng Securities Pte. Ltd.

Islamic finance in Singapore has been growing slowly since the early 1990s with the introduction of retail Islamic products such as takaful, Islamic banking windows, and unit trusts. However, its growth has also been haphazard, with small bursts of commitment from the government and equally sporadic occurrences of corporations raising capital in accordance with Islamic principles.

To understand this industry in Singapore, we have to be cognizant of the social and political dimensions unique to a multireligious secular state, and we will also note the difference between the retail and corporate sectors and how the emphasis seems to be more on the latter.

Past Performance

The definition of success in the Islamic finance industry tends to be driven by comparisons of volume of sukuk issuances or the number of Islamic banks present in a country. If we used these benchmarks, then Singapore would clearly not meet the mark. However, if we consider this industry as part of the overall status of Singapore as an international financial centre, then Singapore has every right to be proud of where it is today.

A good well-rounded financial center offers a full suite of financial services and products according to the needs of the market, and by that ...