Saturday, Jul 20, 2013
A side issue of events in Turkey and Egypt has been the impact, if any, on the prospects of Islamic finance, given certain sensitivities. It is only in relatively recent times in both countries, even within the past year, that steps have been taken to further establish Sharia-compliant banking institutions, and pave the way for sovereign sukuk debt issuance. It appears, however, that the sectorâs expansion should not be especially affected by the political tensions, a sign not only of the market requirement for Islamic products at retail level, but also the institutional awareness, politically and financially, of the investment and national funding flows that might be tapped. Michael Grifferty, president of the Gulf Bond & Sukuk Association in Dubai, says it is too early to say whether Islamic finance will âfall into the political mixâ in Egypt, but in Turkey, where the severity of the turmoil has been contained, he doesnât âsee any negative effect at allâ. Khalid Howladar, senior credit officer at Moodyâs, advises that âwhile political instability can severely impact the operating environment for banks, the long-term trends and opportunities for the sector remain strongâ.
By Andrew Shouler Financial Correspondent
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