Islamic finance is expanding its reach across sectors ranging from global bond issuance to hedge funds - and even retail banks and home buyers in the U.S.
That portends increased job opportunities for individuals able to work with Sharia-compliant finance concepts that bear exotic names such as Sukuk, arboon and ijara.
"With the Middle Eastern economy booming, partly thanks to soaring oil wealth, the Islamic financial industry has been expanding at a clip of about 15% a year, according to accounting firm KPMG, and is on pace to reach $1 trillion in two years. The money is seeking new outlets and Western financial institutions are seeking new clients - opening the door for more aggressive methods to reconcile two worlds that don't easily mesh," The Wall Street Journal reports.
Separately, Islamic Finance Information Service reported that worldwide issuance of Islamic bonds, known as Sukuk, soared 75 percent in this year's first half, to a record $24.5 billion.
Issued primarily by Muslim-based institutions like the government of Malaysia and the Qatar Real Estate Investment Company, the investments allocate risk among parties to comply with the Quran's prohibition on paying or receiving interest. While marketed mainly within Muslim countries, international Sukuk bonds sold to global investors make up a growing share of the total market. Deutsche Bank was the leading underwriter of international Sukuk bonds, with $952 million issued this year.
Meanwhile, Islamic finance is making headway in other, less obvious places. Thursday's page-one WSJ story explains how an American-born Islamic finance pioneer is marketing a Sharia-compliant trading system to hedge funds, and has also helped various banks in the U.S. create mortgage alternatives for Muslims buying homes here.
Guidance Financial Group says it's provided over $1 billion in Sharia-compliant home financing in the U.S. The five year old Reston, Va.-based company operates in 20 states and Washington, D.C.