The Islamic Bank of Asia Limited Singapore: The Fulcrum of Islamic Finance Development Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. The Islamic Bank of Asia Limited accepts no liability whatsoever with respect to the use of this document or its contents.
Singapore: At The Heart of Asia – The Fulcrum of M-East and F-East Islamic Finance Asset Size: US$1 trillion Middle East: 50% Far East: 25% China: 1.3 bn pop Bahrain GDP: US$2,668bn India: 1.1 bn pop GDP: US$906bn 2 hours 3 hours SE Asia: 568 m pop 4 hours GDP: US$1073bn 5 hours 7 hours Page 2
Singapore: A Strategic Hub for Islamic Finance The status of Singapore as a regional financial hub is an opportunity for Islamic finance…. 28,000 International Companies: 11,200 NA, Europe, Japan 1,900 China 1,900 India 1,500 Australia & New Zealand 7,500 Rest of Asia 4,000 Rest of the World ….to become a significant alternative financial solution regionally and globally. Page 3
Singapore: A Strategic Hub for Islamic Finance Singapore has built a reputation as a credible and transparent financial centre, which is exactly what Islamic finance needs to shed its image as a “niche” solution. Growing AUM – A sign of confidence SGX listing – With a market cap of circa S$800billion, this is the choice of good 891 S$ Bn corporations to tap equity. 720 F or e ign Companie s 573 37% 465 344 307 276 Singapore Companie s 63% 2006 2000 2001 2002 2003 2004 2005 S o urc e : MAS Asse t Manage me nt S urve y 2006 Page 4
Singapore: Almost 700 Financial Institutions 157 Banks 153 Insurance Companies 97 Fund Managers 77 Securities Dealing 67 Financial Advisors 62 Insurance Brokers 40 Futures Trading 36 Corporate Finance 3 Finance Companies 1 Islamic Bank Page 5
Singapore: Still No. 3 Financial Centre (Mar 09) Page 6
Singapore: Financial Sector Growth 1974- 2007 Banking Assets 1974 Aug 2007 S$36 billion S$1.79 trillion Stock Market Capitalisation 1975 Oct 2007 S$14 billion S$824 billion FX Average Daily Turnover 1974 Sep 2007 S$0.8 billion S$344 billion Asset Management 1990 2006 S$18 billion S$891 billion Singapore Government Securities Market 1987 Oct 2007 S$4.5 billion S$96.3 billion Page 7
Singapore: Islamic Finance Milestones 2005 - 2007 2008 - 2009 • MAS became a member of IFSB • 5% concessionary tax rate for qualifying • Banks allowed to undertake Commodity Shariah compliant financial activities Murabaha for both financing and deposit taking 1 st Shariah compliant ETF launch on SGX • • Removal of double stamp duties in Islamic transactions involving real estate • 1st Commodity Murabaha by SGX Listco • FTSE-SGA Asia Shariah 100 Index launched • 1st conversion of REIT into Islamic REIT • GST and Income Tax Act have been amended • 1st Sukuk issuance by AAA rated to cater for Islamic finance transactions sovereign in the world • Sukuk enjoys similar concessionary tax as bond Page 8
Singapore: Has Made Significant Strides, Still A Long Way To Go Common challenges e.g. • Product Development • Risk Management • Standardization of Shari’a opinions • Management buy-in of clients o Comfort level with structure o Confidence in risk mitigation o Robustness of infrastructure o Ease of documentations Islamic finance has come quite a way in Singapore. It still has quite a journey to travel. Let’s enjoy the ride! Page 9
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