First-ever barometer for the development of the Islamic Finance industry.
Initial findings show Saudi Arabia receiving strong scores in most areas
The Kingdom leads in terms of Islamic finance assets and education, but lags behind in governance
Dubai, UAE – Thomson Reuters , the world’s leading provider of intelligent information for businesses and professionals, announced finding from its Islamic Finance Development Indicator (IFDI). The IFDI was developed in collaboration with the Islamic Corporation for the Development of the Private Sector ( ICD ), the private sector development arm of the Islamic Development Bank (IDB). The IFDI, which will be officially launched at the Global Islamic Economy Summit, aims to expand the scope of Thomson Reuters ‘ universe of Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry.
The IFDI is part of Thomson Reuters new information solution catering to the growing need for better access to Islamic finance investments and markets, Zawya Islamic – a unique first of its kind solution for Islamic finance and Shari’ah-sensitive investors. Zawya Islamic will be an add-on to Zawya Markets – the leading Middle East and North Africa business information and investment opportunities platform.
Powered by data from Thomson Reuters and partnering with global Shari’ah and Islamic Finance market players, standard setters and authorities, Zawya Islamic makes Shari’ah-compliant investment, decision making and networking with the Islamic markets easier amalgamating:
- Fatawa, standards, regulations, legal documentation and product guidance notes, intelligently connected with scholars and instruments;
- Deep fundamental data on global Sukuk, Islamic funds, Islamic banks, financial institutions and Shari’ah-compliant equities;
- Islamic finance news, research, indices, money market and benchmark rates;
- The IFDI and the Islamic Finance Gateway Community.
The indicator measures five key components – quantitative development, governance, social responsibility, knowledge and awareness. Based on this analysis, the IFDI has found that Saudi Arabia has the second largest Islamic finance sector, after Malaysia, with Islamic finance assets in excess of $270 billion in 2012. This consists mainly of Islamic banking assets of $217 billion, Sukuk of $22 billion and Islamic funds of $18 billion.
Saudi Arabia was also in the top ten countries for educational infrastructure, with 7 universities offering degrees and 22 institutions offering courses in Islamic finance. In terms of research published in the last three years, the kingdom had 12 research papers, of which 9 were peer reviewed.
Saudi Arabia also performed well in terms of awareness, with 670 news articles, 2 conferences and 7 seminars dedicated to Islamic finance in 2012. In terms of Sharia governance, the Kingdom has 40 Islamic finance scholars, making third behind Bahrain (53) and Malaysia (47).
However, it did not fare as well in terms of governance. Saudi Arabia has yet to introduce dedicated regulations for Islamic finance institutions and continues to score poorly in terms of financial disclosures compared to its peers.
Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters , said: “This indicator, the first of its kind for the Islamic Economy, will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry. The development of Islamic finance infrastructure will be a key driver for the establishment of the Islamic finance industry.”
Khaled Al-Aboodi, Chief Executive Officer, Islamic Corporation for the Development of the Private Sector , said: “Today’s findings are a perfect example as to how and why the IFDI can identify the critical growth components of the Islamic Finance industry. As expected, Saudi Arabia sits at the forefront of the Islamic finance industry and is a leading hub in many categories. However, our research also identifies areas of focus that require improvement, particularly governance aspects, to bring the country in line with other Islamic finance hubs.”
Dr Sayd Farook, Global Head of Islamic Capital Markets for Thomson Reuters , said:
“Unlike most commentaries on Islamic finance that simply focus on assets and performance, the IFDI provides equal importance to all aspects of the industry when assessing its depth and development. Our initial research indicates, as expected, that Saudi Arabia is one of the leaders in the Islamic finance industry in most dimensions, but identified governance as a key area for improvement. This research will enable policy makers and practitioner to compare themselves with their peers and prioritise areas that require development. Thomson Reuters is committed to leading the charge in information and analysis to support the global Islamic finance industry, with Saudi Arabia continuing to be a key country of focus.”
The Global Islamic Economy Summit, organised by Thomson Reuters and the Dubai Chamber of Commerce & Industry, will take place on 25th & 26th November 2013 in Dubai, United Arab Emirates. For more information and to register for the event, please visit www.globalislamiceconomy.com.
About Thomson Reuters
Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reutersemploys approximately 60,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges. For more information, go to thomsonreuters.com
About the Islamic Corporation for the Development of the Private Sector
The Islamic Corporation for the Development of the Private Sector ( ICD ) is a multilateral developmental organization affiliated with the Islamic Development Bank (IDB) Group. Its authorized capital stands at $2.0 billion. Its shareholders consist of the IDB, 52 member countries, and five public financial institutions. Headquartered in Jeddah, KSA, the ICD was established by the IDB Board of Governors during its 24th annual meeting held in Jeddah in November 1999.
The mandate of the ICD is to support the economic development of its member countries through provision of finance to private sector projects in accordance with the principles of Sharia’a law i.e., Islamic Law.
PR Manager, Middle East, Africa & Russia / CIS, Thomson Reuters
Nabil El Alami
Division Head – Group Marketing & Communication, ICD
+966 2 646 8192