Will Islamic finance emerge unscathed?
The financial crisis may have dared to stick its ugly head above the parapet in the GCC, but one area seemingly sheltered from the machinations of the global markets is the Islamic finance space where firms remain as hungry for talent as ever.
The consensus among experts is that the sector is due to grow by 20-25% annually in the long term, as studies by both Dow Jones and Ernst & Young demonstrate. And research by Financial News suggests that Islamic finance may actually benefit from the crisis.
Rushdi Saddiqui, global director of Dow Jones Islamic Finance Indexes, says: "The financial crisis took place while the Islamic finance sector was still in its early stages and its spread in the global markets was limited. Islamic banks are still trying to create instruments to diversify their activities and this will help the sector avoid high risks."
This bullish attitude is reflected in the recruitment market, reckons Mohammad Shafique, of the Institute of Islamic Banking and Insurance: "The industry is growing, more jobs are being created and the need for talent is ever increasing," he says.
William Coles, managing director of specialist Islamic finance recruiter the Lyle Group, tells us: "It is a developing area that is sucking up people with conventional knowledge who can then apply it to the Islamic market. Currently, the products are so vanilla that if you have good product development knowledge then it's not too difficult to make the switch."
However, while the innovation in the development of sukuk products may be running full steam ahead, the global financial crisis has affected one corner of the sector.
Writing in a Reuters supplement on the Islamic finance industry, Salman Younis, Asian chief executive of Kuwait Finance House, said that new issuances of sukuk bonds has slowed as the financial crisis has escalated. This, he says, has led to a relative scarcity of bonds for the secondary trading market, which is essential for the ongoing development of the industry in the Middle East.
However, a report by International Financial Services London reckons Islamic finance will eventually emerge from the crisis unscathed.
