Islamic finance is a large industry, operating in the Middle-east, Asia and Europe including the UK. This industry operates in over 70 countries. The size of the Islamic financial services industry was US$ 1.9 trillion in 2016.
The major segments of the Islamic investment market are Islamic banking (78.9%), Sukuk or Islamic securitisation market (16.8%), Islamic funds (3.0%) and Takaful or Islamic insurance (1.3%). The key regions of the Islamic Investment market are Asia, Gulf Cooperation Council- GCC (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman), Middle East and North Africa- MENA (Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, West Bank and Gaza and Yemen).
Islamic Investment Opportunities
There are providers of Islamic investment services in Australia. A recent survey by the Islamic Financial Services Council of Australia (IFSCA) found that Australia has approximately 10 entities providing various types and levels of Islamic finance and investment services to all Australians including Muslims. They are able to facilitate Islamic investments and generate a good rate of return for investors.
The Islamic investment services entities have classified the Australian industries where money may be gainfully invested in accordance with Islamic norms and values. They designate them as approved industries and excluded industries where there are restrictions in terms of Islamic investments.
The approved industries in Australia include properties, infrastructure, healthcare, telecommunications, natural resources/mining, technology, utilities and manufacturing. The excluded industries comprise of interest based instruments such as bonds and treasury bills, alcohol, gambling, tobacco, armaments, banks and pig products.
Islamic Investment Products in Australia
There is a wide range of Islamic Investment products available in Australia including
a) Income Fund
b) Property Trust
c) Units in Friendly Societies (Co-operatives)
d) Islamic Pension/Annuity
e) Islamic Cash Investment
f) High Wealth Investment
g) Australian Shares
h) International Shares
Islamic financial advice is available to grow and protect the wealth of Australian Muslims. This advice may act as an enabler for Islamic investment as the intricacies of investment, taxation and ever-changing regulations are not obvious to general investors.
Australia has a secure and competitive investment environment which offers political stability, growing economy as well as good legislative and regulatory framework to protect the community of investors.
An appropriate Investment advice entails a long-term strategy for investments. A speculative behaviour to earn quick bucks is rarely a good approach to grow and protect financial resources. Based on the Australian approved industries, the best idea for an Islamic investment portfolio would be to diversify into property, shares and Islamic Cash investments over a relatively long-term.
Islamic investments by Australian Muslims will enhance economic growth, create employment opportunities and improve the standard of living for all Australians.