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Thursday, April 25, 2024 6:51 GMT
Qatar is slated to see more Islamic exchange traded funds (ETFs) as well as the advent of Shariah-compliant pension funds and real estate investment trusts (REITs), which would ensure Doha a preeminent place in the global Islamic funds market. A recent report of the Qatar Financial Center (QFC) said recent and planned launches of Shariah-compliant ETFs indicate efforts for asset managers to attract international investors. ETFs also enable asset managers to tap the retail market, as this fund structure makes it more accessible to retail investors."Leveraging this position, the launch of further Islamic ETFs and the introduction and regulation of Sharia-compliant pension funds and REITs will place Qatar in line with developed Islamic fund markets such as Malaysia," said the report 'Qatar Islamic Finance Hub 2019'.The Islamic asset management landscape has been transformed with the introduction of the country’s first Islamic ETF, which captured more than one-third of total Islamic funds’ assets under management in 2018. "The success of the fund has encouraged the creation of new units, including another Islamic ETF that will be focused on Islamic stocks outside Qatar," it said. Shariah-complaint REITs, in particular, offer real estate investors and owners an innovative solution to capture the real estate asset’s value and growth, it said.The QFCRA (QFC Regulatory Authority) has already passed amendments to its CIS (collective investment scheme) rulebook to allow the introduction of REITs, while Qatar Stock Exchange (QSE) is looking into a listing framework for these funds, it said. A majority of these funds are established by larger QFC-based managers, which are subject to QFCRA’s CIS rules. The development of a strategic plan for Islamic funds and wealth management at regulator level (QFCRA and the Qatar Financial Market Authority) would provide further support, enhancing global competitiveness.The strategy is encouraged to focus on developing comprehensive regulations guiding the establishment or issuance of new types of funds and their operations, as well as outline more conducive rules for the operation of foreign investment managers."Qatar is well-positioned to seize on its potential of becoming a leading interconnected Islamic finance hub...The QFC sees significant promise in Islamic finance’s expansion globally and in Qatar, driving an impetus to identify concrete business opportunities on its platform," said Yousuf Mohamed al-Jaida, QFC Authority chief executive, in the report.With the strengthening trends of sustainable and responsible investments, Malaysia has seen the launch of new Shariah-based ESG (environment social governance) funds, as the country moves to the adoption of sustainable investment frameworks under the VBI (value-based intermediation) initiative, it said."Qatar can capitalize on this trend, backed by a sustainable and responsible investment framework, which would create a unique selling point attracting further demand from conventional investors with ESG mandates," it said.