BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE: STT), the world's leading provider of
financial services to institutional investors, today released its Vision
Report on Islamic Finance, citing a market that is growing by as much as
20 percent a year since 2003. This seventh paper in State Street's
series of Vision Reports estimates that total assets under management by
Islamic financial institutions now exceeds $600 billion.
Rod Ringrow, senior vice president of State Street based in Doha, Qatar
said, "Against a backdrop of a challenging global environment, Islamic
finance is emerging as a competitive form of intermediation in the
international financial system and it has a key role to play in
restoring confidence in the markets. Opening the door to additional
forms of investing, particularly ones that emphasize the sharing of risk
and reward, will certainly help to facilitate this goal."
State Street says that the Islamic Finance industry has become a growing
option for investors and a competitive form of financing for commercial
enterprises. It is also allowing for the further diversification of
risks and is contributing to an efficient international allocation of
resources across borders.
While the selection of products at large Islamic financial institutions
remains relatively narrow, some newly created Shariah-compliant
instruments are beginning to rival those of conventional banks. The
principles of Shariah, the moral and legal code that governs the
industry's development, impacts the underlying structure of its products
and services, and ultimately serves as one its biggest selling points to
investors. At its core, Shariah specifies that money has no intrinsic
value of its own and should be used as a tool for measuring the value of
assets. On the deposit side, these instruments include profit sharing
investment accounts (PSIAs), which give depositors the right to share in
Islamic banks' profits and losses. In addition, several money market,
equity, real estate, private equity and infrastructure funds are now
being offered.
Ringrow added, "To date, the global financial crisis has had a limited
direct effect on Islamic finance as investors seek out asset classes and
markets they hope will provide stability. The tenets of Islamic finance
- lower leverage, transparency and no speculation - make it an
attractive investment option in any market environment, especially
today's. In fact, demand for Islamic finance products and services in
the global market may be exceeding current availability. Islamic finance
will attract an increasingly global group of investors in the years
ahead, and we believe the industry as a whole will respond with new
products that will offer greater variety and sophistication for a host
of complex, cross-border transactions."
To obtain a copy of this Vision Report on Islamic finance or for more
information, members of the press can contact publicrelations@statestreet.com.
All other requests can be directed to vision@statestreet.com.
Previous reports in State Street's Vision series address topics that
have included the pensions industry, sovereign wealth funds, the
insurance industry, hedge funds and derivatives.
State Street Corporation (NYSE: STT) is the world's leading provider of
financial services to institutional investors, including investment
servicing, investment management and investment research and trading.
With $11.3 trillion in assets under custody and $1.4 trillion in assets
under management at March 31, 2009, State Street operates in 27
countries and more than 100 geographic markets worldwide. For more
information, visit State Street's web site at www.statestreet.com.
Source: State Street Corporation
Contact: State Street Corporation
Carolyn Cichon, 1-617-664-8672