Business | Banking
Standard Chartered plans Sharia contracts
Bank will introduce new product in Asia
- Bloomberg
- Published: 00:00 August 12, 2010
Dubai: Standard Chartered Plc, the UK bank that earns most of its profit from emerging markets, plans to introduce Sharia-compliant contracts in Asia to hedge against changes in commodity prices.
The products, which the London-based bank made available in the Arabian Gulf in March, will allow buyers and sellers to agree on fixed or floating prices and make it easier for companies to protect themselves from volatility in goods such as sugar, rice, wheat and crude oil, Afaq Khan, chief executive officer of Standard Chartered's Islamic banking unit in Dubai, said in an interview on August 9.
"This year the big push is on commodity derivatives," he said. "We will certainly be offering them in countries like Malaysia and Indonesia in due course. When there is sufficient demand we will go to the central banks to seek approval."
Asia accounted for 68 per cent of the total $7.8 billion (Dh28.6 billion) of sukuk, or Islamic bonds, sold worldwide this year, according to data compiled by Bloomberg.
Economic growth in developing Asia, including Malaysia and Indonesia, will accelerate to 9.2 per cent in 2010 from 6.9 per cent in 2009, according to estimates by the International Monetary Fund on July 7.
Expansion in the Middle East was forecast at 4.5 per cent, compared with 2.4 per cent last year.
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