Managers of Islamic endowments with $105 billion in assets are seeking to diversify out of bank deposits, providing Shariah-compliant funds with the chance to capture new business, Ernst & Young LLP says.
These “largely untapped” endowments, or awqaf, have as much as $40 billion of cash parked at commercial banks, Ashar Nazim, Manama-based executive director and head of Islamic financial services for Ernst & Young, Bahrain, said in a telephone interview Nov. 9. A waqf typically consists of cash or assets, including land and buildings, donated by individuals or institutions for charitable and religious purposes.
“Over the next 18 months, the Islamic endowment segment could prove to be a major stimulus for growth in the Islamic funds industry,” Nazim said. “They realize that they cannot manage it on their own and they need to involve the formal financial industry.”
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