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BNP Paribas aims for major Islamic business growth

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Points of Essence:

  • BNP Paribas plans to expand its Islamic financial business in two years’ time acommodate the growing demands from the Middle East.

by Cecilia Valente

BNP PARIBAS: Expectations remain high about growing Islamic business.

BNP Paribas Investment Partners, the French group’s fund management arm, plans to grow its Islamic business five-fold or more in the next two years, its Middle East head told Reuters on Monday.
“We currently manage about half a billion dollars in total sharia compliant assets and our target is to multiply our assets by over five times in the next two years,” Tariq Al Samahiji, chief executive for the Middle East and North Africa said in an interview.

Al Samahiji expected growth to come from Middle Eastern investors, but also from those in the West interested in Sharia management because it demands investments be backed by assets and rules out leveraged companies.

The bank currently offers equity Sharia management and has recently started marketing its first Islamic bond or sukuk fund.

“At this point in time the fund is very much focused on companies that are in the Gulf and this is largely to address demand from our clients,” he said.

Al Samahiji expected the sukuk fund to attract investments from institutions and wealthy individuals, but stressed BNP Paribas would not market the fund to the retail market.

A Moody’s report recently said global sukuk issuance in 2008 fell by over 50 percent because of market conditions, but the French bank was still confident this was the right time to launch a sukuk fund.

“We cannot say this is the bottom of the market, but we are long-term investors hoping to attract long-term investors.”

The fund is managed by BNP Paribas fixed income specialist subsidiary Fischer Francis Trees and Watts and has received seed capital from the bank to the tune of a few million dollars.

The fund offers exposure to both investment grade corporate debt, government-sponsored enterprises and sovereign sukuk issued in the Middle East. (Reuters)

Source: http://www.arabianbusiness.com

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Written by Suapi Shaffaii

February 3, 2009 at 2:18 pm

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