What You Need to Know About Islamic Investments in Singapore

Islamic investments are growing rapidly in Singapore. The country, which is the world’s third-best financial center behind leaders London and New York, is a growing Islamic investment hub. This is evident through the rise of 22% in Islamic investment (assets under management) since 2010. Apart from that, it also has a higher amount of outstanding Sukuk issuances than any other conventional jurisdiction, reaching a high of US$2.71 billion in 2014. Furthermore, Singapore is the only non-Muslim majority country among the top 15 countries for Islamic banking and investment.

Even though the corporate and institutional Islamic investment platform in Singapore looks set for forceful growth in the coming years, similar sentiment cannot be assumed for its consumer or retail investment space. This may be largely due to the lack of critical mass in Singapore, given its relatively small population, of which Muslims form less than a 15% minority, which has caused financial institutions in Singapore to shy away from developing Islamic consumer banking. However, this trend is positively changing.

According to Sani Hamid, Director (Economy & Market Strategy) of Financial Alliance Pte. Ltd., “we are certainly now seeing a higher demand from consumers who want to do their financial planning including investments in a Shariah-compliant manner.” He further continued that they now received more and more queries via social media and also a strong level of participation at Islamic financial planning seminars they hold. Sani heads Financial Alliance Islamic Wealth Advisory (FAiWA).

A similar sentiment is also shared by Helmi Hakim, a certified financial consultant in Singapore. Helmi also manages Takaful.sg, which provides a tool for Singapore Muslims to calculate the amount of riba (usury/interest) incurred in their loans. According to him, there is now more awareness amongst Singaporean Muslims of the need to plan their finances according to Shariah. This is evident through more inquiries and signed-up rates for Shariah-compliant instruments.

Thus far, there have been various Islamic investment types found in Singapore. Other investment options include HSBC Insurance Ethical Global Sukuk Fund, Maybank’s Singapore Unit Trusts Ethical Growth Fund, NTUC Income Takaful fund etc.  The table below summarised the Islamic investment activities in Singapore from its initial emergence in 1991 till the year 2017.

Summary of selected Islamic finance and Islamic investments in Singapore (1991-2017)

Source: Author’s Own

All in all – booming market

Although Singapore remains a relatively new market participant in the Islamic finance space along with challenges ahead in its bid to develop the industry, overall the growth of the Islamic investment space in Singapore can be deemed as encouraging. Apart from greater awareness by Singaporean Muslims now and the growing corporate and institutional investment platforms, it is noteworthy to highlight that the government is also playing a crucial role in harmonising the tax and regulatory treatment of Islamic finance products.

Finally, of course, this short article cannot fully appreciate the nuances found in Islamic investment activities in Singapore; however, it merely attempts to give an overview of the overall Islamic investment activities found in Singapore today.

This article was first published in March 2018 and has been edited and updated for accuracy and clarity. Edited by Anis Shakirah Mohd Muslimin. 

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