Islamic bodies eye corporate funding opportunities in the MENA region
Islamic financial institutions operating in the region are keen to tap into the long term corporate financing opportunities, including project finance that exist in the market, bankers told a gathering of Islamic finance experts and corporate treasurers in Abu Dhabi yesterday.
The International Summit on Islamic Corporate Finance (ICFS 2011), which opened yesterday at the Le Royal Meridien in Abu Dhabi, saw leading Islamic bankers and corporate borrowers engage in innovative discussions that focused on boosting deal flow in the Islamic corporate finance space.
The summit dwelt on how to capitalise on the increasing demand for Islamic finance from the business sector as a diversified component of their funding mix.
In his keynote address Daniele Vecchi, Senior Vice-President and Head of Group Treasury, MAF Holding LLC, said that Islamic finance can play an increasing role in the corporate funding mix as long as institutions are willing to offer innovative solutions that meet corporate requirements. “We understand that the liquidity situation is improving. We need more innovation by Islamic financial institutions to reach out to corporate entities looking for funding, said Vecchi.
Speaking to the media on the sidelines of the event, David McLean, Managing Director of the International Summit on Islamic Corporate Finance, said: “There is no doubt that Islamic finance is maturing into a global phenomenon as highlighted by the increasing appetite for Islamic instruments and deal structures across international capital markets, corporate loans and asset finance.”
Speakers at the event said syndicated financing deals have taken a beating in the region following the global financial crisis as a result of liquidity issues and banks’ compulsion to repair their balance sheets. With the sustained improvement in liquidity and revival in demand for financing bankers expect to see improved deal flows from this year.
“Islamic finance has been emerging as a viable corporate finance alternative, highlighted by several recent landmark transactions both regionally and globally. However, the Sharia compliant corporate finance market has not yet realised its full potential as its value proposition has not been fully communicated to its corporate client base,” said Hussain Al Qemzi, Chief Executive Officer, Noor Islamic Bank and Group Chief Executive Officer, Noor Investment Group.