KUALA LUMPUR: Persistently strong demand for shariah-compliant investments is helping the Islamic asset management sector remain resilient amid the coronavirus-related market upheavals, according to Moody's.
Vice president and senior credit officer Vanessa Robert said Islamic fund managers in the Gulf Cooperation Council (GCC) region benefit from bespoke mandates with a range of affluent clients, including high net worth individuals, family offices, sovereign wealth funds and other government institutions.
"These investors generally have high risk tolerance and long investment horizons," she said in a statement today.
She said net inflows into some large Islamic funds in the GCC countries had remained positive despite weaker markets and lower oil prices, in contrast to the net outflows experience by many western peers.
Moody's expected the growth in Islamic assets under management to slow to 2.0 per cent this year and 4.0 per cent next year.
The credit ratings agency said Malaysia and Saudi Arabia were the largest Islamic financial service in the world, accounting for almost two thirds of Islamic assets under management between them.
Moody's said take-up of Islamic investments is rising rapidly in Saudi Arabia, reflecting growing demand for Shariah complaint products among both corporate and retail investors.
The regulatory environment, characterised by coordination between the Ministry of Finance, the Saudi Arabia Monetary Authority, and the Capital Market Authority, was also supportive, it added.
Meanwhile, innovative shariah compliant product offerings were helping to drive growth in Islamic assets under management in Malaysia.
These include Simpanan Shariah, a Shariah compliant employee provident fund.