Noor Islamic Bank looks East as it seeks to expand its international business

"We see tremendous opportunities stemming from greater cooperation between financial institutions in South East Asia and the GCC," said Hussain AlQemzi, GCEO of Noor Investment Group and CEO of Noor Islamic Bank.

"Asian countries are facing escalating infrastructure and development needs, backed by solid economic growth, at a time when the outlook for global lending markets remains uncertain. Our aim is to work with existing financial institutions, in countries like Malaysia, Indonesia and Singapore, to help bridge the funding gap created by the shrinkage of the global liquidity pool.

"It is a model that we have successfully used in Turkey. There we have worked with more than 85 financial institutions, from 26 countries, to close Islamic market mandates valued at over $2.5bn (Dhs9.3bn) in the past two years. We aim to replicate that model in Asia, as we fulfil our mandate to become a global player in the Islamic finance industry," added AlQemzi.

Over the past two years, South East Asia, which is home to 227 million Muslims and includes Indonesia, the world's most populous Muslim country, has seen rapid growth in Islamic finance. Meanwhile, secular countries like Singapore, Hong Kong and Australia have opened the door to Islamic finance by modifying local laws and tax regulations to permit shari'a compliant investments.

"Those countries with large Muslim populations, like Malaysia, Indonesia and Brunei, offer significant retail and wealth management business opportunities. While secular countries like Singapore and Hong Kong, that are already global financial centres in their own right, are well positioned to drive wholesale Islamic capital products, such as Sukuks, equities and funds," AlQemzi said.

Noor believes that as trade and investment links between the Middle East and Asia deepen, it is well positioned to help South East Asian governments and corporates to attract Islamic finance investment from the GCC, where liquidity levels remain high, despite lower oil prices.
"As the internationalisation of Islamic finance gathers pace, it will increasingly contribute to the more efficient mobilisation and allocation of funds between our two regions," Al Qemzi said.

"Historically Asian investors used to come to the Middle East. However, we foresee the reverse taking place as Asian economies open up to cross border investments and demonstrate their resilience."

During a recent visit to Singapore, Al Qemzi met with officials from the Monetary Authority of Singapore (MAS), including Tai Boon Leong, Executive Director Development, who oversees the growth of Singapore's nascent Islamic finance sector. The discussions focused on Noor's entry into the Singapore market and what role Noor could play in helping to establish Singapore as a regional Islamic finance hub.

"We have always said we will go where the business is. And, although Singapore is a relatively new player in the Islamic finance sector, its reputation as a stable and open financial hub, makes it attractive to GCC investors. A strong Islamic finance sector would complement Singapore's position as a regional finance hub," AlQemzi explained.

"We see a number of business opportunities stemming from our engagement with Singapore, including Sukuk issuance and the provision of shari'a compliant real estate investment trusts, both of which have strong regional growth potential."

At $80bn, South East Asia's Sukuk market is the largest in the world, accounting for over two thirds of the global Sukuk market. In the first six months of 2012, Malaysia accounted for $46.8bn of the total global Sukuk issuance of $109.4bn, according to KFH Research.