Global Investing

Clear road ahead for depressed Dubai

Dubai’s deepening real estate slump has brought unexpected benefits to its time-poor urban residents.

Speaking at the Global Islamic Financing Summit, Dr. Humayon Dar, CEO of Shariah-compliant consultancy BMB Islamic, said Dubai was a much nicer place to live now that the immature infrastructure system was not overwhelmed with construction traffic and armies of property speculators.

“When you got to Dubai you will find that right now, traffic is actually much less but people like me like it because I used to be stuck in that traffic all the time,” Dar said, eyes agleam. ”But now, going from A to B is so fun - I like it.”

The desert city – famed for its dramatic skyline and commonly referred to as the Gulf’s biggest building site - is reeling from a global meltdown in demand for its unique brand of luxury real estate.  Dozens of development projects worth billions of dollars have been axed, threatening the livelihood of thousands of construction workers and their families.

But those banking on a rapid rally in Dubai’s property market can draw some comfort from Dar, who believes the city will recover quickly — with a little help from its wealthy neighbours.

The best of both worlds?

Combined Shariah and ethical/SRI products could be the way forwards for Islamic finance investing, according to Dr Humayon Dar, CEO at BMB Islamic, the Shariah consultancy at BMG Group.

Speaking at the Reuters Islamic Finance Summit today, Dar highlighted the development of an upcoming F&C fund that will meet both ethical and Shariah investing criteria, and can be sold to both Muslims and non-Muslims. “I see this as the way forward in markets such as Malaysia, where a significant proportion of the population is non-Muslim,” he said, adding that once such products have established a track record, it should appeal to a broader audience, and encourage other launches.

Marrying the Western and Islamic traditions of investing could help Shariah surmount a number of hurdles that have so far limited its appeal. A recent Oliver Wyman survey found that only half of the 1.4 billion Muslims worldwide would opt for Islamic finance if given a competitive alternative to conventional products. Dar said he had conducted his own survey which found that no more than 25 percent of UK Muslims was interested in Islamic banking and finance. “The vast majority prefer competitive quotes from non-Shariah providers,” he said – this is particularly the case in the mortgage sector.