Adopting a slightly different approach at the IFN Investor Forum 2025 in Dubai, the ‘Power Panel: Battle of the Shariah Compliant Asset Classes’ session saw five experts champion why their chosen asset class was superior.
Equities
Buoyed by the recent successful IPO of Omani petroleum giant OQ Exploration and Production (OQEP), CFO – Finance and Procurement Jaber Al Noumani spoke about the excellence of equities.
Beyond allowing domestic retail investors to share in this Omani firm’s successes over the past 15 years, this IPO “also brought in foreign direct investment and attracted foreign investors to the Muscat Stock Exchange to increase its market liquidity and depth”.
While the limelight was on OQEP being the largest Shariah compliant IPO within the GCC region in 2024, Jaber said returns also emphasized the stock’s appeal – with quarterly dividends of 8% to 10% plus performance-based dividends, which will start in July 2025 based on OQEP’s H1 2025 performance.
Cryptocurrencies
MRHB.Network Chairman Khalid Howladar presented the case for crypto or digital assets, stating that “if you are not investing in digital assets, you are missing out on one of the fastest growth tech sectors of the future”.
Acknowledging the high volatility of these digital trades, Khalid said one cannot invest in crypto with a short-term horizon “because timing is everything. It is better to be investing every month or every quarter but not piling in a concentrated way”.
Admiring how quickly Islamic scholars have somewhat embraced the crypto universe, starting with Bitcoin seen as a medium of exchange for transactions, Khalid said perceptions have evolved for crypto to be viewed as a mainstream asset class now.
Gold
Dubai Gold and Commodities Exchange Commercial Director Louis Hems spoke on the glitter of gold, pointing out its traditional safe haven status – where the last half decade in particular saw many central banks increasing their inventories of gold “because they know how precious an asset class this is”.
With prices rising steadily over the past 25 years, gold is valuable as a tangible intrinsic asset with very little uncertainty or speculation – no Riba or Gharar – as a proven hedge against inflation and currency devaluation, globally liquid and universally accepted.
Noting that the UAE recently overtook London as one of the biggest gold trading markets globally, Louis said gold has historical and Islamic significance as a store of value. With “best risk-adjusted returns over centuries, gold has outperformed most asset classes with minimum downside risk.”
Sukuk
Saturna Capital Fixed Income Lead and Portfolio Manager Patrick Drum spoke on the strength of Sukuk, observing how the FTSE Sukuk IdealRatings showed this Islamic instrument never had a negative return over a 12-year period from 2008 to 2020 – outperforming emerging markets equity returns.
“Sukuk has half the volatility of the US Treasury market, one-third less than the JPMorgan EMBI Global Core, one-sixth less than the S&P 500 and one-seventeenth less than the crude oil market.”
Noting that even gold undergoes pricing cycles, Patrick said a good asset review basis should be that of risk for the level of return. “If we measure risk as a form of standard deviation, it is a mathematical way of capturing return dispersion.”
Real estate
Walid Shalan, the group CFO of Estithmar Holding, said many appreciate the resilience of real estate investments – despite the challenges having to deal with cross-border transactions and also achieving Shariah compliance.
The biggest hurdle is that of Islamic financing availability in promising countries like Iraq or Libya, where such markets are still relatively immature, noted Walid, adding that certain real estate classes – like hospitality – also may not meet the 5% revenue limit of non-Shariah activities like alcohol sales.
“To be Shariah complaint in real estate investments, there needs to be a total regulatory agreement in all countries in order to be fair.”
Fan favorite
Voting by the audience’s show of hands was overwhelmingly in favor of gold, demonstrating the enduring appeal of this yellow metal which continues to hold sway over Islamic investors due to its resilience and status as a safe haven asset class.
Sukuk came in second, with crypto trailing in closely, seemingly suggesting that Islamic investors gravitate toward familiar ‘safer’ low-risk assets but are also intrigued by the high-risk high-reward asset class of crypto due to its outstanding performance over the last decade.
