Islamic funds conference calls for financial institutions to play key role in rebuilding confidence

The world's largest gathering of Islamic investment leaders opened today at the Gulf Hotel in Bahrain where renowned international and regional decision-makers stressed the need for the industry to boldly adapt in order to continue thriving as the market landscape continues to shift.

In his opening address, Dr. Mohammed Nedal Alchaar, Secretary General of AAOIFI noted that there exists the need to remove irrational fear from the market investors and counterparties through enhancing disclosure of financial information particularly with regards to the rights and obligations of fund providers as well as managers.

"The current financial environment has underlined the importance of clarity, transparency and comprehensiveness of financial reporting. In order to facilitate financial systems to withstand systemic shocks, For Islamic capital market and funds, these rights and obligations must also reflect the true underlying Shari'ah principles. In this respect, AAOIFI will continue to ensure that its international Islamic finance standards support the market requirement for robust financial reporting and Shari'ah compliance"

Key messages that emanated from the discussions included the need for more relevant investment strategies, improved supervisory frameworks, and new product innovations that further enhance stability and strengthen the global Islamic investments industry.

The findings of the 2009 Ernst & Young Islamic Funds & Investments Report were also launched at the conference. This 3rd annual edition of the Report was even more keenly anticipated this year as the research delved into the fall-out of the global economic crisis on the Islamic investments industry and its key players.

According to Sameer Abdi, Partner-Head of Islamic Financial Services at Ernst & Young:

"This is a time when strategic choices have to be made and market participants have to adapt to survive. The financial crisis over the past year has seen unprecedented turmoil in global financial markets. Panic and volatility within global equity markets have pushed equity values to historical lows. Coupled with a correction in real estate prices, this has forced investors to reconsider their choice of Islamic asset manager as well as asset allocation strategy. Last year's Report highlighted the phenomenal rate of growth experienced in the Islamic asset management industry. The landscape has changed significantly as the global economic crisis has taken hold. Despite this setback, the fundamentals of the Islamic fund industry remain strong. With almost US$50bn in fund assets under management and a large, expanding and untapped Muslim population, there are likely to be considerable opportunities in the future."

Held in Strategic Partnership with the Central Bank of Bahrain for the fifth consecutive year, the conference attracted more than 400 of the leading minds and decision-makers in the global Islamic investments industry as speakers and delegates.