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Islamic funds urged to tap new markets

MANAMA: The $52 billion international Islamic funds industry is being urged to offer more innovative areas of investment and to expand into untapped geographical markets by leading Sharia scholar Dr Mohammed Daud Bakar.

According to Ernst & Young data, Islamic assets under management currently amount to almost $52bn across 700 worldwide funds.

"But most funds are dedicated to equities and everybody is doing that," said Dr Bakar.

Dr Bakar is a Sharia board member of the Accounting and Auditing Organisation for Islamic Financial Institutions, the International Islamic Financial Market, the Securities Commission of Malaysia, Morgan Stanley and Bank of London and Middle East, among others.

He believes Islamic fund managers should look at commodities such as gold and silver, metals and agriculture as well as relatively untouched markets for Islamic funds like Australia, Thailand, Vietnam, Africa and Latin America.

"They would provide interesting propositions for investors while other industries like shipping, technology and aviation could be fruitful areas for innovators to look at in the creation of new funds," Dr Bakar said ahead of the Amanie-Failaka Symposium 2011, which will take place at the Intercontinental Hotel, Abu Dhabi, on Sunday.

The event will hear panel discussions from top executives in the field of Islamic finance, including Yavar Moini from Morgan Stanley, Dubai, and Datin Maznah Mahbob of Am-Investment Bank Group, Malaysia, as well as many other regional decision makers.

As in previous years, the evening will feature the sixth Annual Failaka Islamic Fund Awards, which recognises the best-performing funds and managers in the field of Sharia-compliant investment.

It will focus on the issues on capturing demand for Islamic capital market products, specifically the challenges of finding placement and distribution strategies.



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