New York will play host to two major conferences on Islamic finance this month, events likely to underscore that the city is a bit player in this vast and growing market sector — particularly when compared to London.

The British capital is New York’s chief rival as a global financial hub, and it has a big head start in the race to attract the billions of investment dollars from the oil-rich Middle East. This is critical because Islamic finance — banking and investing in compliance with Islamic religious law, known as Sharia — is perhaps the fastest-growing sector of the global financial services market.

Islamic institutions around the world hold assets estimated at more than $300 billion, with another $400 billion in financial investments, according to a 2006 study by the accounting firm KPMG. Islamic finance is growing at a rate of about 15% a year, the study found. A consulting firm, McKinsey & Co., predicts growth of at least 20% in this sector over the next five years.

“There is not much value added that New York can bring to the party,” a Harvard Business School professor emeritus who is an expert on Islamic finance, Samuel Hayes, said. “This is not where they come to look for products,” he added, referring to Muslim investors.

Over the next three weeks, two conferences will attempt to change this. Shariah Capital, an Islamic financial advisory firm based in Greenwich, Conn., is sponsoring a conference October 23–24 titled “Islamic Finance in North America: Accessing Innovative Islamic Finance Opportunities” at Manhattan’s 3 West Club. A conference company, Financial Research Associates, is holding a second event, the “Islamic Finance Summit 2007,” at the Helmsley Hotel in Midtown on October 29.

Sharia-compliant finance firms do not collect interest on investments, eschew borrowing money, and do not short-sell stocks. There is also a prohibition against investing in “sin stocks,” including companies that promote gambling, pornography, or alcohol. (MORE)


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