With innovations continuing to generate returns from faith-based investing, so is the drive to provide access to more investors in sophisticated schemes that were typically reserved for the super-wealthy.
Leonteq Securities is making Shariah compliant investing more accessible by automating its structured products to expand the reach for investors in the GCC. The Zurich-based firm is redeveloping trust certificates with Murabahah and Waad contracts – that typically set entry points at above US$1 million.
Islamic gold banking expert Aittreya Sriram Ramanujam is envisioning a Shariah model of “commodity banking”, where asset-backed financing and investing will apply to all commodities, with crude oil as its flagship. The innovative concept aims to bring the Islamic principle of risk-sharing and asset-derived income to volatile markets to benefit citizens in developing nations.
Regulations, state actions
Bahrain is leading the charge in digital Islamic finance with new comprehensive regulations for Shariah compliant stablecoins that became effective the 2nd July 2025. Malaysia, a long-standing pioneer in Islamic finance, is playing catch-up with its own rules that advocate a cautious, reactive approach to digital assets compared to Bahrain’s proactive leap.
Egypt’s Financial Regulatory Authority has given the green light to the establishment of the Bokra Real Estate Investment Fund and the Bokra Investment Fund for Minerals Investment. The regulator also approved licenses for Tilda Securities Brokerage Company and Trend Holding for Financial Investments, expanding investment opportunities in the region.
The Pakistan Credit Rating Agency became the first rating agency to list on the Pakistan Stock Exchange’s Growth Enterprise Market Board with the IPO oversubscribed more than four times and raising nearly PKR396.2 million (US$1.39 million).
Malaysia’s Federal Territory Islamic Religious Council designated Bank Rakyat as the nation’s first trustee for public cash Waqf funds, launching the Jariah Al-Barakah humanitarian initiative. This partnership will streamline the collection and management of Waqf, overseen by a joint committee.
Hejaz Equities Fund (Managed Fund) in Australia obtained Shariah compliance certification from the Australian National Imams Council. The certification validates the fund’s adherence to Islamic principles for investors.
Market expansion
Malaysian P2P firm Microleap is set to expand its Shariah compliant operations into Indonesia and the Philippines by early 2026, seeking to attract more institutional investments. The goal is to establish a wholly-owned subsidiary in the Mindanao region to provide fully Shariah compliant financing, with plans to extend to Manila and the rest of the Philippines.
Arqaam Capital and ASB Capital have teamed up to launch the ASB Global Sukuk Fund, a protected cell company available to a wide range of institutional and high-net-worth investors. The collaboration expands options for those seeking Shariah compliant fixed income opportunities.
Bank Syariah Indonesia launched an Islamic Endowment Fund at the BSI International Expo 2025, partnering with key foundations to support various community welfare programs. Funds collected will be invested using Shariah compliant schemes, with returns dedicated to education, healthcare, economic empowerment and more.
Fitch Ratings projects growth for Islamic derivatives market in select regions, driven by new product rollout and supportive legislation. While instruments like profit rate swaps and forward foreign exchange contracts were common in some GCC locations, they remain largely underdeveloped in Indonesia and Malaysia.
The UAE Banks Federation has committed to investing more than AED1 trillion (US$272.29 billion) towards sustainable and green finance by 2030, in alignment with ESG goals.
InvestGB, Gulf Bank’s investment arm, has launched its second Shariah compliant money market offering, the Lulwa USD Money Market Fund. This fund offers weekly liquidity and targets low-risk Islamic investments like deposits and investment-grade Sukuk, building on the success of their earlier Lulwa KD fund.
UAE-based asset manager Aditum has introduced two new feeder funds under its Global Access ICC platform, allowing investors to tap into fixed income strategies managed by UK-headquartered Pimco. These public funds, registered with the Dubai Financial Services Authority, are now accessible to wealth investors in the UAE.
Returns, investor protection
Oman Investment Authority, one of the world’s top 10 sovereign wealth funds, reported US$4.12 billion in net profit for 2024 from managing some US$53 billion in assets. The fund employs a flexible investment strategy, combining conventional and Shariah compliant approaches across over 50 countries, with a significant domestic portfolio.
Islamic investors in Turkiye are showing a clear preference for safety and capital preservation, with fund flows from Q4 2024 to Q1 2025 focusing on commodities like gold. The trend reflects caution amid economic headwinds, as investors seek protection against inflation and currency volatility.
Real estate
Saudi Arabian asset manager Sidra Capital has secured a GBP54 million (US$74.19 million) bilateral investment loan from Lloyds Bank International. This loan will be used to recapitalize five properties within Sidra’s UK investment portfolio.
UAE residents were the primary drivers of UK property searches from the GCC in Q1 2025, accounting for 58% of all inquiries. This trend, noted by Shariah compliant UK digital bank Nomo, highlights a strong interest in UK properties for both holiday homes and investment opportunities, especially in London and the North West.
Umm Al Qura for Development and Construction in Saudi Arabia is partnering with Aljazira Capital and Naif Al Rajhi Investment Company to launch a SAR1.4 billion (US$373.3 million) real estate private fund. This fund will develop hospitality, residential and commercial components within Mecca’s Masar Destination.
Jabal Real Estate Investment Fund officially announced its conversion to Shariah compliance, a move approved by its board of directors on the 2nd July 2025. The conversion marks a significant shift for the fund.
