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December 13, 2024
Pakistan Hosts Islamic Capital Markets Conference in Push to Make Financial System Shariah-Compliant
Islamabad: Pakistan’s Finance Minister Muhammad Aurangzeb highlighted the importance of Islamic capital markets in helping the country remain on the road to economic stability, as the South Asian nation hosted the second International Islamic Capital Markets Conference & Expo in Karachi on Thursday.
Islamic Capital Markets are a sub-sector of capital markets that promote Shariah-compliant securities and instruments as alternatives to conventional ones.
The minister was addressing the inaugural session of the conference that opened on Thursday in Karachi, Pakistan’s financial hub, where senior officials such as Dr Sami Al-Suwailem, acting director general of the Islamic Development Bank Institute, Akif Saeed, chairman of the Securities Exchange Commission of Pakistan, Saleemullah, deputy governor of the State Bank of Pakistan, and other senior delegates were in attendance.
The minister noted that Islamic finance, specifically Islamic capital markets, can play a pivotal role in Pakistan’s economic progress as instruments such as sukuk, equity funds, and Shariah-compliant investment vehicles not only attracted investment but also reduced reliance on interest-based borrowing.
“In his keynote address to the session, the finance minister described the conference as reflective of Pakistan’s growing commitment to fostering a robust Islamic capital market, highlighting the country’s dedication to transforming its financial ecosystem in line with Shariah principles,” Pakistan’s Finance Division said in a press release.
Aurangzeb revealed that as of June 30, 2024, 56 percent of market capitalization at the Pakistan Stock Exchange comprises Shariah-compliant securities.
“In the collective investment segment, 48 percent of assets under management of mutual funds, 66 percent of assets under management of voluntary pension funds, and 95 percent of assets under management of REITs are already Shariah-compliant,” the press release said.
“These statistics deflect the progress that we have made over a year.”
Aurangzeb said that a growing interest in Shariah-compliant investment products was a testament to the increasing global demand for ethical and sustainable financial solutions.
“The steady and healthy growth of Islamic finance, both in Pakistan and internationally, reflects the shifting preferences of investors toward value-based financial systems,” he said.
The minister noted that the full realization of Islamic finance’s potential was not possible without the collaborative efforts of scholars, financial institutions, regulatory bodies, and industry practitioners.
They, he said, can address existing challenges, develop innovative Shariah-compliant financial products, and build public trust.
“We must ensure that Islamic finance is not only rooted in Shariah principles but also practical, transparent, and capable of meeting the evolving needs of our people,” Aurangzeb said. - Arab News
Courtesy Arab News
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