2010: ACTIVE YEAR FOR ISLAMIC FINANCE

Judging by the number of deals closed, funds launched and the presence of new institutions, 2010 is turning out to be a very active year for the Islamic finance market in Saudi Arabia. The Kingdom, in terms of pool of funds, is the largest player in the global Islamic finance market, although its industry, like elsewhere, is subject to traditional bottlenecks, scarcity of human capital resources and underdeveloped market awareness. There is no doubt that the Saudi market is underpinned by its economic fundamentals that the Kingdom is the world’s largest oil producer and exporter. In addition, while the official foreign reserves held by the Saudi Arabian Monetary Agency (SAMA) are just under half a trillion US dollars, private liquidity in the Kingdom is estimated at $1.2 trillion. The Kingdom has also weathered the storm of the current global financial crisis with 2009 real GDP growth estimated at 0.2 per cent and expected to accelerate to 3.2 per cent in 2010. “The Saudi government’s timely and appropriate fiscal and monetary policies have helped to support growth and the stability of the financial system. The key drivers behind our macro view are a sustained global recovery and the associated higher oil prices, continued expansionary fiscal policy and the resumption of local bank lending, easing financing constraints on the private sector. We forecast nominal GDP will reach SR1.5 trillion this year,” said Omar Al-Jaroudi, chief executive officer of SHUAA.