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Islamic finance: A new buzz in the finance sector
The finance industry is hiring again. If you are planning on making a move into finance, or reconsidering a new niche, there is a specialist area estimated to grow by 15 to 20 per cent per annum. Some project the market will be worth over trillion by 2014. The growth of Islamic finance has got the finance world talking. The UK is now the biggest Islamic finance centre in Europe, and as the Muslim population grows, Australia is keen to establish its own place in this growing sector. This means more opportunities for Australians in both the UK and Australia.
Islamic finance refers to business practices that are approved by Islamic Law or Shariah. Dr Hayat Khan, Director, Islamic Finance Programme at La Trobe University explains that Shariah "prohibit business exchanges that involve riba (which includes interest based loans) and gharar (contractual uncertainty which includes a ban on selling something that isn't owned at the time of sale)".
These features prohibit short selling (selling something that does not exist) and engaging in speculative investments such as derivatives – features some believe made the sector more resilient to the Global Financial Crisis (GFC). A 2010 Austrade Report cites a 2009 survey by The Banker, showing that Shariah-compliant assets held by the world's top 500 Islamic Financial Institutions increased in value by almost 30 per cent during the height of the GFC.
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