Gulf ties could aid islamic finance in italy, supporters hope

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Feb 18 Bankers and academics in Italy are stepping up efforts to develop Islamic finance in the country, a campaign which could benefit from growing economic links between Gulf countries and the euro zone's third largest economy. Islamic finance has so far made only marginal progress in continental Europe, mainly in France and Germany. But Italy is seeking trade and investment with wealthy Gulf Arab states as a way to grow out of its debt problems. Kuwait's sovereign wealth fund announced this month that it would invest 500 million euros ($685 million) in Italian companies in coordination with the Italian government's own strategic investment fund. Italy made a similar deal with Qatar last year. Italy's trade ties with the Gulf are booming; its exports to the United Arab Emirates hit 5.5 billion euros in 2012, a 16.7 percent rise from 2011, government data shows. Only about 2 percent of Italy's population of 61 million are Muslim. But the hope is that as Gulf companies and investors increase their activities in Italy, Islamic finance - which follows religious principles such as bans on interest payments and pure monetary speculation - will follow. Italian firms raising loans could use Islamic structures to attract sharia-compliant banks from the Gulf, for example. Italian bonds and equities could become attractive to Islamic funds if they were certified as sharia-compliant."I think the development of sharia-compliant products is an important opportunity for Italy - it might become one of the drivers to get finally out of the economic crisis," said Enrico Giustiniani, analyst at Banca Finnat Euramerica in Rome."There is quite a big interest from Islamic funds and Islamic institutional investors to invest in Italy, especially in this period with many companies on sale."

INDEX Banca Finnat has gone as far as designing a hypothetical index of sharia-compliant stocks, which features some of the country's best-known luxury brands, Giustiniani said."A specific index still does not exist, but the interest is very high. The luxury sector is a brand required by foreign institutional investors and it is a very important growth driver for our country."Gulf investors have already shown considerable interest in Italy's luxury good firms; in 2012, for example, Italian fashion brand Valentino was bought by Qatar's royal family.

Fondazione Istud, a Milan-based business school, plans to establish an Islamic finance position this year, intended as a venue for industry research and to develop proposals aimed at Italian decision makers. This would be the first structured attempt to provide industry information and influence legislation, Marella Caramazza, director-general of Fondazione Istud, told Reuters."Certainly regulators and practitioners seem to demonstrate a general interest on this subject in our nation, but at the same time tend to have a very conservative approach."At this stage, we are trying to involve stakeholders and gather funds at different levels, in order to begin with the activities," Caramazza added.

REGULATIONS These activities should include a review of existing regulations, mainly those covering real estate registration taxes, said Hatem Abou Said, representative in Italy of Bahrain's Al Baraka Banking Group ; var median = (relatedItemsTotal / 2); var $relatedContentGroupOne = $('.related-content.group-one ul'); var $relatedContentGroupTwo = $('.related-content.group-two ul'); $.each($relatedItems, function(k,v) { if (k + 1 = median) { $relatedContentGroupOne.append($relatedItems[k]); } else { $relatedContentGroupTwo.append($relatedItems[k]); } }); } else { $('.third-article-divide').append($('div class="related-content group-one"h3 class="related-content-title"Also In Financials/h3ul/ul/div')); $('.related-content ul').append($relatedItems); } },500); } Next In Financials Greece's NBG likely to sell its insurance unit this year -CEO SOFIA, Jan 4 National Bank of Greece (NBG) expects to sell its subsidiary National Insurance this year and plans other sales as part of its restructuring, its chief executive said on Wednesday. BRIEF-Ford Motor Credit files for notes offering * Ford Motor Credit Co LLC - files for notes offering; size not disclosed - SEC filing UPDATE 1-U.S. LIBOR breaks above 1 pct for first time since 2009 Jan 4 The rate banks charge each other to borrow dollars for three months rose above 1 percent on Wednesday for the first time since May 2009 as global interest rates extend their climb on expectations of accelerating growth and inflation. MORE FROM REUTERS window._taboola = window._taboola || []; _taboola.push({ mode: 'organic-thumbnails-a', container: 'taboola-recirc', placement: 'Below Article Thumbnails - Organic', target_type: 'mix' }); Sponsored Content @media(max-this site) { #mod-bizdev-dianomi{ height: 320px; } } From Around the Web Promoted by Taboola window._taboola = window._taboola || []; _taboola.push( { mode: 'thumbnails-3X2', container: 'taboola-below-article-thumbnails', placement: 'Below Article Thumbnails', target_type: 'mix' } ); window._taboola = window._taboola || []; _taboola.push