IslamicFinance.de

Over the past three years, the Hult Prize has taken on some of the planet's toughest challenges. These have included Education, Energy, Housing, and Water. For the 2013 Prize, President Clinton has personally selected the challenge: the Global Food Crisis.

A detailed case study, narrated by President Bill Clinton, will be released to all selected participants in early January to set the framework for this year's challenge. Competitors will then be asked to develop social enterprises that answer the President's Challenge.

The global food crisis can be approached through multiple lenses, such as: distribution, manufacturing, production, technology and many others. Each, represents an opportunity for innovation. Nearly 1 Billion people in the World are Hungry, that is over 1 out of every 4 children. Ironically, our global economy produces enough food each year to feed everyone, however more than one-third of the food generated for human consumption continues to be lost or wasted.

ABOUT YPP:

The Young Professionals Program (YPP) is the strategic talent pipeline for the professional career in the Islamic Development Bank (IDB) Group. The Program is designed for outstanding young graduates who can significantly help the IDB Group to carry out its mission and attain its objectives.

This Program enables each Young Professional (YP) to receive extensive exposure and experience of the IDB Group’s various activities through job rotations in different departments. Participants will initially spend two weeks Orientation stage in HRMD. Then, 27 months in Foundation stage which will be split into three rotations of 9 months each in IDB Group departments.

Participants will also benefit from a coaching/mentoring arrangement and a wide range of relevant training and developmental opportunities.

Upon successful program completion, the participant will gradually climb up the professional grades in the IDB Group

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Dear Reader,

Islamic finance had another great year. Many of its market segments progressed, like for example the Sukuk market gaining more maturity. Despite the ongoing debt crisis a good sign of hope and happiness.

Nevertheless we are - as an industry - still not satisfied with the achievements. Islamic finance shall grow stronger in terms of social impact and in terms of substance:

Hence, please allow me to re-iterate my call for participating in international initiatives beyond just our own industry to learn and spread knowledge and experience:

Calling Islamic financial institutions to become member of the United Nations Finance Initiative
http://www.islamicfinance.de/?q=node/811

Inshallah we see more Islamic financial institutions taking a lead in SRI, Social Impact Investing and other approaches while contributing with Islamic finance knowdledge to the conventional industry. The time is now; and there are signs that Malaysia aims for a lead:
http://www.islamicfinance.de/?q=node/4151

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

Well, repeatedly we read and hear about the lack of profit/loss sharing (equity finance) in Islamic finance. Here my five cents about it:

1) Islamic commercial law, Fiqh Muamalat, per se has no preference of either permissible mode of finance, be it musharaka, ijara or murabaha whatsoever. All is halal. However, the call for modesty of debt in many hadith and the seriousness of being indebted upon death (withholding of death prayer) shows a call for a solid equity portion in business; let's call it a technical preference.

2) If we look up all debt financing modes (e.g.Murabaha, Ijara) there are remaining difficulties to finance wages, rents and installments on fresh debt. This is a true indicator for a required minimum amount of equity in a company.

3) Point 1) and 2) leads us to demand a sound debt/equity ratio.

IslamicFinance.de offers an overview about new job openings of October 2012 herewith - firms aiming to be included please send a job profile/hyperlink to newsdesk@islamicfinance.de - the full details of the advert has to be accessed by the hyperlink below the brief description:

Product Manager, Islamic Banking

Standard Chartered Bank - United Arab Emirates-SCB (United Arab Emirates)
Job Description
?Development of Islamic wealth products across CBMS, insurance and investment streams to create customer value proposition.
?Ensure successful implementation of the Islamic banking strategy across high value segment.
?Concentrated responsibility to work with the Priority/Wealth/Private/SME product/frontline teams and support functions to build on the current Islamic banking capabilities and to create seamless customer experience
?Act as a product specialist for RMs on client meetings to introduce and explain the Saadiq solutions to meet their needs
?Financial budgeting and business forecast. Evaluation of financial performance.

THE NINTH INTERNATIONAL CONFERENCE ON
ISLAMIC ECONOMICS AND FINANCE (ICIEF)
Growth, Equity and Stability: An Islamic Perspective
10-12 September 2013, Istanbul, TURKEY

The Ninth ICIEF at a Glance

Recovery from the global financial crisis and subsequent economic downturn remains fragile. Persistent risks to financial and economic development include sluggish growth in developed countries – which is now spilling over into developing economies as well; increasing income and wealth inequalities; and still-unrestored financial, economic and political stability in many regions. High poverty and unemployment rates, large macroeconomic imbalances, deteriorations in sovereign credibility, increasing food price volatility and food shortages, and lack of access to basic infrastructure further intensify and magnify these risks – particularly for the underprivileged segments of the world population. As a result, for many countries it has become even more challenging to achieve the Millennium Development Goals (MDGs) set by the United Nations.

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association, Inc. (ISDA) are pleased to announce the launch of the ISDA/IIFM Mubadalatul Arbaah (Profit Rate Swap) product standard to be used for Islamic hedging purposes.

The Mubadalatul Arbaah (MA) standard follows on from the “ISDA/IIFM Tahawwut (Hedging) Master Agreement” and provides the industry with a framework for Islamic risk mitigation. The launch of the Tahawwut Master Agreement as the template for Shari’ah-compliant risk management was officially announced at a press conference hosted by Central Bank of Bahrain in March 2010.

Dear Reader,

IslamicFinance.de is privately funded for many years. Now, for the first time, you have the possibility to make a contribution, from one Dollar upwards!

The technical details, and the money transfer via paypal is organised by Kapipal a new online fundraising tool:

http://www.kapipal.com/islamicfinance

On the blog I gave some more thoughts about Islamic finance media for those interested: http://www.islamicfinance.de/?q=node/3454

Please also note: The fundraising action has a deadline, so act today, not tomorrow and tell your friends about it!

All donors who will leave a message will be listed in the article, which follows after closure of the fundraising period.

I am happy to meet you in person either on 19th March in Milano (http://www.islamicfinance.de/?q=node/3396) or on 10th May in Frankfurt (http://www.islamicfinance.de/?q=BAFINII) at the respective Islamic finance conference.

Wa at Taufiq min Allah, all the best,

Michael Saleh Gassner

Dear Readers,

Islamic finance media are a tricky service. This is true for various reasons: The Internet eats up the revenues, because everything ought to be free. Islamic banks are still a niche phenomena, and international banks like UBS or Deutsche are almost as large as the entire global Islamic finance industry. Consequently the marketing budgets are much lower, too.

Last not least, who should advertise? The banks among themselves or to the clients? Advertising from bank to bank, does usually not make much sense, but real client oriented formats are hard to find, too. May be this is a niche. Others, who could finance Islamic finance media are basically the service providers to the banks, but due to the limited number of Islamic financial insitutions, direct marketing, e.g. face to face meetings will be preferred.

This in short is the background why Islamic finance media are not so well established in terms of journalism and research, but mostly reflecting the press release as criticised by the makers of the Islamic Globe. See: http://www.theislamicglobe.com/index.php?option=com_content&view=article...

Norton Rose Seminar Documentation

Making Their Mark: Women Working in the Middle Eastern Financial
Industry

OECD: Women’s Access to Finance in the Middle East and North Africa (MENA) Region

Women’s Empowerment through Islamic Microfinance in Egypt

IDB Prize for Women’s Contribution to Development: PROMOTING WOMEN’S ROLE IN FINANCE AND ECONOMY

CALL FOR PAPERS - Islamic capital markets, Deadline: Submission of Abstract: March 15, 2012
Islamic Research and Training Istitute – Islamic Development Bank, Jeddah, Saudi Arabia

Islamic capital markets are to become an important part of the Islamic financial system. While new products are steadily coming into the market and the Islamic investment instrument are growing, Islamic capital markets still constitute a very small niche. For a discernible impact on the investment promotion, market stability, and equitable socio-economic development there is a growing need to accelerate the process of product development, to create conducive regulatory environment and to improve the market practices. This task requires development of new human capital and knowledge base.

With this larger objective, the immediate focus of this conference is on three issues:
• Design and use of Islamic financial products for Islamic capital markets.
• Identification of the needs for and the implications of market regulations for development of Islamic capital market.

In its 2012 Islamic Wealth Management Report illustrated by masterpieces of Islamic calligraphy, by the Chinese Muslim master Hajji Noordeen, deals with the theme “The path to corporate transformation – converting a company to Islam”.

Bank Sarasin reviews the complexities of converting a business to Islam, a topic which is rarely discussed or written about. Conversion is complicated by the need to address every aspect of a business, the lack of broadly accepted standards and regulations, and differences in the Muslim world itself. The Report, released today, is the Bank’s third on Islamic Wealth Management.

Converting a business to Islam can increase the value of a company by 18-25% due to the scarcity of genuine Islamic investments. But the conversion process is arduous, extending from the design to distribution and beyond, to how the company spends its profits. As Sarasin notes, the market potential is massive, with the global Muslim population expected to increase by 26% to 2030, to 2.2 billion, rivalling China and India in terms of market size.

The 1st Ernst & Young World Islamic Banking Competitiveness Report 2011 presented at the 18th Annual World Islamic Banking Conference stated that Islamic banking assets with commercial banks globally will reach US$1.1 trillion in 2012, a significant jump of 33% from their 2010 level of US$826 billion. In the MENA region, Islamic banking assets increased to US$416 billion in 2010, representing a five year CAGR of 20% compared to less than 9% for conventional banks. As new geographies open up to Islamic banking, the MENA Islamic banking industry is expected to more than double to US$990 billion by 2015.

Abstract academic paper:

Using a large international sample of 35 developed and emerging markets, we analyze
whether Islamic indices exhibit a different performance to conventional benchmarks. While there is no compelling evidence of performance differences in robust Sharpe ratio tests and after controlling for market risk, we find a significantly positive four-factor alpha for the aggregate developed markets region. This outperformance stems, however, mainly from the U.S. and is largely attributable to the exclusion of financial stocks in Sharia-screened portfolios. As the extensive downturn of financials is related to the recent financial crisis, we do not argue that this outperformance will continue over time. The style analysis reveals that

Islamic indices invest mainly in growth stocks and positive momentum stocks. This, for a passive portfolio intriguing result can, however, be explained by the strong sector allocation towards energy firms and their strong momentum characteristic during the sample period.

The prime theme of this event will be the impact of the recent rapid changes on the
Islamic finance sector in all pertinent aspects. The Conference will consider the
spectacular political and socio-economic developments that we have been witnessing and
their probable effects on the performance and future position of Islamic financial
institutions (IFI’s), the regulatory set-ups, and popularity of Islamic products being
offered to the public, governments and business firms.

The Conference is being organised by Emerald Group Publishing, the world’s leading
scholarly publisher of journals and books on business and management. Over 220
academic journals are currently published by Emerald, covering some 24 managerial
disciplines, in addition to a strong and growing presence in other related fields such as
LIS, social sciences, and engineering.

This Conference follows on the success of the Global Islamic Marketing Conference held
in Dubai over the period 20-22 March 2011, organised by Emerald in association with the
United Arab Emirates University.

Conference Objective

The chief objective of the forthcoming Conference is to assess the future of this sector,

UNESCO works in education, the sciences, culture and communication and information. Recently it lost a substantial portion of funding as the newspapers reported (see for details: http://www.bbc.co.uk/news/world-middle-east-15527534 ). It is worth considering how to support the UNESCO and their goals:

"UNESCO works to create the conditions for dialogue among civilizations, cultures and peoples, based upon respect for commonly shared values. It is through this dialogue that the world can achieve global visions of sustainable development encompassing observance of human rights, mutual respect and the alleviation of poverty, all of which are at the heart of UNESCO’S mission and activities.

The broad goals and concrete objectives of the international community – as set out in the internationally agreed development goals, including the Millennium Development Goals (MDGs) – underpin all UNESCO’s strategies and activities. Thus UNESCO’s unique competencies in education, the sciences, culture and communication and information contribute towards the realization of those goals.

Global leaders point way to economic recovery at UN summit

Gordon Brown, Mary Robinson and global CEOs call for sustainable financial sector reform

Washington D.C., 20 October 2011 – With economic recovery topping the United States and global political agenda, a group of CEOs, major investors and bankers together with former United Kingdom Prime Minister Gordon Brown and President of Ireland Mary Robinson called for a far-reaching reform of the global financial system at a summit which ended in Washington D.C. today.

Amid a growing wave of protests highlighting economic concerns in countries from the US to the UK, Japan and Greece, more than 500 senior finance executives and policy-makers from around the world met at the United Nations Environment Programme Finance Initiative Global Roundtable (UNEP FI) summit to find sustainable solutions to tackle the drivers of market volatility and address the deepening rift between the rich and the poor.

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