Global Islamic investments to hit USD1.8tr in 2013: E&Y 

(MENAFN) Ernst and Young (E&Y) stated that during the current year, investments in accordance with Islamic law (Shari'ah) will hit USD1.8 trillion, reported Xinhua News.

E&Y said that Islamic financial institutions in Southeast Asia and the Middle East and Africa (MEA) region are boosting their investments that are carried out in line with Shari'ah, as these economies have surpassed the global economic expansion since the start of the new millennium, and developed their regulatory system to stimulate Islamic banking.

However, financial institutions and banks in the US and Europe have trimmed their exposure in banking in line with Islamic law, due to the financial crisis that forced them to return to their roots by lowering their exposure in foreign fields, including Islamic finance, and by limiting their investments in emerging markets.

The Shari'ah law forbids interest-based and speculative investment, including short-selling or trading derivatives, furthermore, it bans stocks from firms that produce alcohol, weapons, entertainment or pork meat.

E&Y said that sukuk (Islamic bonds) are not like ordinary bonds, as they do not pay interest based on a coupon, but share profits of a specific, tangible asset, such as a real estate or a commodity, with the investors.

Last year, global issuances for sukuk surged by 43.36 percent from 2011, reaching USD121 billion, with Malaysia contributing with more than 60 percent of total issuances

It is worth noting that the Islamic finance industry is expanding by 15 percent annually, and is expected to double every 5 years.