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The Islamic Banking and Finance Summit, held in Dubai, Manama, Kuala Lumpur, London, Geneva and Jakarta from February 15, 2010 till February 18, 2010 is a step to gather insight on the status of the Islamic finance industry by the experts themselves. A part of the Summit held at Dubai on February 17, 2010 was an event to remember. The beautiful Emirate saw one of the most eminent scholars and gurus of the Islamic Finance industry getting together to discuss the latest as well as significant aspects of their field of expertise. It was an event which laid great stress on the trendy Islamic financial products that can be and must be designed as soon as possible, keeping the interests of investment bankers, hedge fund managers and even the house-hold consumers.
The speakers had various views on the current status as well as the future of the Islamic finance industry. One of the reputed bankers, Harris Irfan who heads the Islamic Products at the Barclays Capital, spoke about the upcoming boom in the Shariah Financial industry. He stressed on the importance of the contribution of the Private equity sector in triggering the boom in this industry. He also felt that the scope of financial engineering of the Shariah PE funds is quite limited and insisted that the Private equity fund managers should welcome the Shariah fund concepts in future.
Mohd Bakar, MD of Amanie Islamic Finance Consultancy and Education LLC, advocated the Islamic derivatives to avoid the various types of risks faced by the Islamic banks and financial institutions. The global head of Shariah finance at Simmons & Simmons, Mr. Muneer Khan shared views with Mohd Bakar on the topic of shariah-compliant derivatives. He said that the management of currency risks by implementing products such as the profit rate swaps designed on the foundation of a murabaha contract is absolutely essential for the Islamic banks to save themselves from considerable losses due to forex fluctuations. According to this method, parties enter into a future contract in which they agree to swap their respective fixed and floating profit rates with each other. This just hedges the risk without any speculative or Haram activity.
Mr. Yavar Moini of Morgan Stanley considered the Malaysian markets as the driving force of the sukuk industry and discussed the correlation between the strength of the capital markets and performance of the Islamic finance industry.
Many prominent financial institutions announced their forthcoming plans about launching shariah-compliant products in full swing. Invest AD of Abu Dhabi plans to launch a Shariah-compliant Private Equity fund in October this year. The idea of commodity derivatives aimed at managing the commodity prices was announced by the Chief Executive of Standard Chartered Bank Saadiq, Mr. Afaq Khan.
Overall, the experts held encouraging views in favor of introducing innovative shariah-compliant financial instruments keeping the untapped industries like shipping and steel in mind and not restricting themselves to target only the house-hold consumers for housing funds and takaful products, as it has been happening in the past. The new approach would act as a strong catalyst for the proliferation of the Islamic Finance industry all over the globe.
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