The union of regional operator ASI with the conservative traditions of conventional global financier HSH Nordbank will create a strong player operating on Islamic principles initially in the GCC and in the medium term throughout MENA.
Mr. Pegman Haghshenas, Chief Executive Officer of ASI, said:
"The time is right for change and our expectations for this partnership, operating in line with Sharia principles, are high."
Haghshenas added, "Islamic finance can become the catalyst that restores the deal flow, previous levels of transactions and ultimately the confidence in the financial system needed to reverse the move away from growth. We see opportunity and change in this region and this partnership will ensure we have the financial muscle and expertise to be at the forefront of the turnaround."
"Islamic finance offers a different model - one which could become the template for mainstream investment and funding. A new approach is needed and Islamic finance provides that," said Haghshenas.
The new partnership follows a spate of optimistic forecasts for a regional upturn fuelled by Islamic finance. This was the strongest message to emerge from the recent Global Alternative Investment Management Middle East conference held in Dubai. Now Islamic finance, regional sovereign wealth funds, and economies driven by strong energy sectors are being predicted to hold the key to the recovery of the global economy.
Experts are convinced Islamic financial instruments can play a key role in freeing up the global financial system's stalled liquidity and have predicted that an increasingly prominent role for sukuks outside niche markets. These Islamic financial instruments have been part of a strong German trend towards Islamic finance that earlier saw the likes of the state of Lower Saxony issue its own sukuk. HSH Nordbank, a global player within its core sectors with a balance sheet of around 200 billion euros, is not merely maintaining Germany's interest in the market but is determined to take it further.
Mr. Michael Bresges, a Director with HSH Nordbank, said: "This partnership with ASI opens the door to opportunities that cannot be found elsewhere at this time. There is real synergy between the traditional approach that has characterised HSH Nordbank's operations and culture and the low-risk, co-operative investment that are features of Islamic finance."
"We have received an enthusiastic response from institutions in the region and we are confident that we will see strong growth on the back of numerous opportunities," Bresges added.
The two partners are expected to formally set up a joint venture in 2009 to cement their partnership.
Mr. Haghshenas said: "We are bringing something different to conventional methods of funding and investment. We believe this formula has the ability to make a genuine difference and our sphere of operation will eventually extend throughout the MENA region."