Sharia hiring set to move higher
Barely a week goes by without Singapore hosting an Islamic finance conference or seminar. And, judging by the appearance of senior Monetary Authority of Singapore (MAS) officials at these events, Singapore is desperate to emulate Malaysia in becoming an Islamic finance hub.
These are early days, but heavyweights including HSBC Amanah and Kuwait Finance House recently established Singapore operations. Local banks such as UOB and DBS also run small designated Islamic finance teams. And they'll be adding staff as Singapore's regulatory framework becomes conducive to Sharia-compliant products.
Recruiters certainly think Singapore has the potential to seize more Sharia business. According to Chia Tek-Yew, financial services industry partner at Heidrick & Struggles, Singapore needs to exploit its inherent advantages over Malaysia to attract funds from the lucrative Middle Eastern market.
"The sovereign risk is much better, there is a healthy market between the Singapore dollar and US dollar, Euro and Yen, and MAS has created a favourable platform to raise funds," argues Chia. "The issue presently is the lack of certified Islamic products to invest in after attracting money from the Middle East. Singapore could carve a niche as the Asia hub for institutional fund management and asset gathering. It just requires some clear defining of investment grade Islamic products."
"If you take wealth management, much of the Islamic business is serviced out of London, but there is no reason why Singapore could not fulfil this role," adds Andrew Price, director of banking at PSD Group. "As a market, Singapore has certain advantages, not to compete with Malaysia - which has more potential on the retail side - but to carve out its own niche. Some banks and the authorities believe it has huge potential on the corporate and institutional side."
Price predicts asset managers will soon establish real estate and infrastructure funds in Singapore. "This will provide the momentum for the market to start working on Islamic certifications and development of compliant products. I can also see financial institutions establishing separate Sharia-compliant Islamic funds/wealth management companies as a distinct client segment, similar to the non-resident India market," he adds.