The UAE is firmly establishing itself as a leading hub for Islamic finance, with Fiona Bassett, the CEO of FTSE Russell, emphasizing the country’s pivotal role in fostering financial innovation across the Middle East. During the unveiling of the FTSE ADX 15 Islamic Index (FADXI15), Bassett remarked on the significant interest from both local and international investors, which she attributes to the UAE’s expanding influence on the global economic landscape.
“We’re seeing growing investor interest, both domestic and international, driven by the region’s expansion. This reflects the growing importance of the UAE on the global stage,” Fiona Bassett stated in her comments.
A Focused Approach to Shari’ah-Compliant Investments
The new FTSE ADX 15 Islamic Index is designed to provide targeted exposure to the top 15 Shari’ah-compliant companies listed in Abu Dhabi. “This latest launch provides focused exposures to the top 15 Shari’ah-compliant companies, within Abu Dhabi,” she explained, highlighting the importance of such financial products for investors seeking to navigate the Islamic finance sector.
Recent findings from the Islamic Finance Development Report 2023 indicate remarkable growth in the global Islamic finance market, with assets surging by 11% in 2022 to reach approximately $4.5 trillion. Notably, Islamic banking represents a substantial 72% of this figure. Since 2012, the sector has witnessed a staggering growth rate of 163%, with projections estimating a rise to $6.7 trillion by 2027.
“For us, this is providing a toolkit for investors to meet the burgeoning demands that we’ve seen in Islamic finance,” Bassett added, reinforcing the idea that tailored investment options are critical to accommodate the expanding market.
Strategic Partnerships for Market Advancement
Bassett also underscored the strategic importance of the Abu Dhabi Securities Exchange (ADX) in the Islamic finance ecosystem. FTSE Russell’s long-term partnership with ADX is central to its mission of delivering innovative products to the market. “Our partnership with ADX is central to FTSE Russell’s strategy,” she stated.
As FTSE Russell aspires to be the preeminent index partner in the region, it aims to provide a wide array of equity and fixed-income solutions. “The increased liquidity and market capitalisation have led to the inclusion of more UAE companies in our global indices, from small-cap to large-cap. We’re optimistic about the region’s future growth potential,” she concluded.
A Bright Future for Islamic Finance in the UAE
The UAE’s proactive approach in the Islamic finance sector, coupled with strategic collaborations and innovative financial products, positions it at the forefront of global Islamic finance development. As the region continues to grow and attract investments, the prospects for both investors and financial institutions remain promising.
With a focus on Shari’ah-compliant offerings and a robust regulatory framework, the UAE is well on its way to solidifying its reputation as a beacon of financial excellence and innovation in the Islamic finance landscape.
