The sharia-compliant asset management industry is on the cusp of a boom. Following a difficult couple of years, in which the poor performance of regional equity markets limited the sector’s growth, the stage is set for a longer term resurgence of Islamic funds. This positive momentum has emerged as global equity markets have rallied and improving investor sentiment has spurred fresh demand for asset management services.
Yet, this outlook is also being shaped by longer term dynamics, including a more progressive regulatory environment, the prospects for enhanced cross-border distribution of funds, as well as the development of sharia-compliant pension programmes. Collectively, these trends are feeding into the growing confidence of a sector that is relatively nascent, even in the context of the Islamic finance space.
