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Halal and Islamic finance markets will converge, says Al Islami CEO

Islamic stock exchange for both Islamic financial services and halal FMCG companies is a logical outcome– Saleh Lootah at the 8th Kuala Lumpur Islamic Finance Forum 2011.

October 9, 2011 6:00 by

The $1 trillion (AED3.68 trillion) global Islamic finance industry is in the process of developing a road-map to converge on $651 billion (AED2.4 trillion) halal market, says Saleh Abdullah Lootah, Managing Director of Al Islami Foods.

He was speaking during the 8th Kuala Lumpur Islamic Finance Forum 2011 (KLIFF), organized by the Centre for Research and Training (CERT) just last week.

“Islamic stock exchange for both Islamic financial services and halal FMCG companies is a logical outcome and a natural relationship of the two fast growing industries. The time has come to sustain and channel this growth,” said Lootah.

“Growing Muslim population, awareness and consumers, their rising literacy and professional training, sustainable nature of Islamic economy, role of press and social media are the contributing factors for the impressive growth of Islamic finance and Halal food industry.”

From the international Halal food industry, Al Islami was the only halal food company from the Middle East invited to the international event.

Concurrent industry events were organised to cover the complete package of Islamic finance industry that included: Shariah Forum, The Takaful Rendezvous, Ethics and Finance Roundtable Exhibition, Workshops, Islamic Finance Essay Competition, and Islamic Finance Awards.

KLIFF 2011 gathered more than 1,500 delegates ranging from regulatory authorities, Shariah scholars, bankers, legal practitioners, Takaful operators, consultants, and academicians in Islamic finance around the globe.

The size of Islamic Finance Market in the GCC
According to a 2009 report titled the Development of Islamic Finance in the GCC, published by the Centre for Study of Global Governance of the London School of Economics:“the value of shariah-compliant assets is impressive in the GCC. The current size of global Islamic finance industry is at over $1 trillion (AED3.68 trillion), with GCC having $262.6 billion (AED964.5 billion).”

Islamic finance in the UAE, reports said, has been recording a steady and impressive growth in last few years with $73 billion (AED269 billion). Industry experts estimate the global industry size to rise to $2 trillion (AED7.3 trillion) in five years.

Malaysia, notwithstanding the efforts of the Gulf countries, claims the world’s largest Islamic capital market with assets rose 15 percent to $123 billion (AED452.6 billion) in 2011. The country has integrated the Islamic sector into its broader financial system, providing institutions as well as intermediaries a deep market in shariah-compliant equities, sukuk, exchange-traded funds, real estate investment trusts and derivatives.

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  1. Dhafer Salih Alqahtani on October 9, 2011 9:33 pm

    Halal as a label carry with it a lot of responsibility, other than the fact its only an industry that produces products or provide services that is in line with Shari’ah. Regardless where the Halal label is used or applied in food and manufacturing or services (Islamic banks are Halal product) should hold to the Islamic principles without compromising its guidelines, values and teachings, for example Halal industry should not be involved for example in child labor, or exploit the underprivileged, paying fair wages and protect the environment (as we are entrusted with earth), their balance sheet as well is Shari’ah complaint …etc.

    For those reasons and others, Halal as an industry should create their own standards-setting body to insure that any products or service want to carry the HALAL label, should be really a Halal in all aspects (substance over form or 3D). It’s the same as with banking where several standards-setting bodies were evolved and created to make sure that Islamic banking is Shari’ah complaints or another word HALAL and not HARAM ( non-Shari’ah complaint).
    When Islamic banks take interest in the Halal industry which is a natural marriage between the two as they both complement each other in term of doing business as they share the same platform (i.e. Shari’ah).

    Accordingly, scrutiny should be applied as those issues will be raised and asked as the Halal industry gain more momentum , by all parties involved, including the investors and shareholders as well as their opponents and critics.

  2. Nasir on October 16, 2011 4:40 pm

    It’s a valuable piece of information about Islamic Finance and Halal industry that Al Islami Foods has released. Thank you Al Islami.


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