Wealth Management

CIBAFI launched Global Forum "Rethinking Values for #Sustainable #Growth"

The General Council of Islamic Banks and Financial Institutions launched its Global Forum 'Rethinking Values for Sustainable Growth' in Manama, Kingdom of Bahrain. The Forum was attended by delegates from more than 28 countries. Special keynote guest Dr. Mark Mobius covered expert views on MENA and emerging markets including the impact of oil prices on economies, as well as what structural reforms are required for sustainable growth.

Satyajit Das: Should we worry about the global economy?

#Debt continues to be a major source of instability for the global economy. Since 2007, global debt has grown by $57trillion or 17 % of GDP. Since 2007, no major economies and only five developing economies have reduced the ratio of debt to GDP in the real economy. In contrast, 14 countries have increased their total debt-to-GDP ratios by more than 50 percentage points. Over 20 countries now have debt-to-GDP ratios above 200 per cent, led by Japan (400 %).

Credit Commons: Solidarity economy money

What if the hundreds, even thousands of existing local currency initiatives were interoperable? Could they constitute a global system of exchange and offer at least a partial alternative to a dominant parasitic financial system? What are the social and technical obstacles to scaling grassroots initiatives which grow out of local community action?
The Credit Commons is a proposal from the builders of two of the largest blocs of community currencies in the world. Tim Jenkin, developer of Community Exchange Systems and Matthew Slater, developer of Hamlets and cofounder of Community Forge. A new white paper introduces the a backbone accounting infrastructure, touches on the economics and the technology, and describes the parts already in place. A small but diverse group has formed around the initiative and set up creditcommons.net where the paper is hosted and developments can be recorded.

Managing Debt in an Overleveraged World

In the years since the 2008 global financial crisis, austerity and balance-sheet repair have been the watchwords of the global economy. And yet today debt is fueling concern about growth prospects worldwide. The McKinsey Global Institute notes in a study that gross debt has increased about $60 trillion – or 75% of global GDP – since 2008. China’s debt, for example, has increased fourfold since 2007, and its debt-to-GDP ratio is some 282% – higher than in many other major economies, including the United States. A global economy that is levering up, while unable to generate enough aggregate demand to achieve potential growth, is on a risky path. But to assess how risky, several factors must be considered.

Emirates Islamic launches Social Banking

Emirates Islamic announced the launch of Social Banking, offering banking services via Twitter, making it the first Islamic bank in the UAE to offer banking services on a social media platform. Faisal Aqil, Deputy CEO, said banking via twitter is especially relevant given the UAE’s advanced social media and mobile phone penetration. Customers will be able to perform select transactions such as balance enquiry, view their last few transactions, and make enquiries about their accounts or credit cards with a simple tweet. To maintain privacy and confidentiality, the bank will only respond to customer queries via a direct message.

INCEIF takes islamic finance education to a global level

Daud Vicary Abdullah, President of the International Centre for Islamic Finance discusses the role of education and specifically higher education programs in Islamic finance. Islamic finance has been growing to where it is today because it has used conventional tactics or conventional instruments. Now there is a big opportunity to use new risk-sharing instruments. The idea is that people get education early and see this not as a religious threat but as a set of options about which they can make realistic choices.

Counting the cost of personal debt in the UAE

Hundreds of readers have written to The National to share their financial woes, following a series of articles in the Money section about worrying levels of personal debt in the UAE. The reason why UAE residents are building up such alarming liabilities is the lack of knowledge about the sky-high credit card interest rates in the country. According to a recent Compareit4me.com survey, about two-thirds of credit card holders are unaware of their card’s interest rate.

Global Islamic Wealth Management Industry Faces Trust Deficit

A global survey on the Knowledge, Attitude and Practices (KAP) of the Global Islamic Wealth Management Industry conducted by Edbiz Consulting revealed that the global Islamic wealth management industry is facing a trust deficit that is hampering the growth of the industry. 48% of the respondents said they have never used any Islamic wealth management products and services, citing lack of understanding, lack of trust and preference to manage own wealth as reasons for not subscribing. Dr Sofiza Azmi, Group CEO of HD-Edbiz Group of Companies highlighted that 40% of Islamic wealth is concentrated in non-Muslim countries.

Islamic wealth management to be new growth area

The Securities Commission Malaysia (SC) plans to launch the Islamic Fund and Wealth Management Blueprint by July to strengthen Malaysia’s competitive position in the global Islamic financial sector. SC chairman Datuk Seri Ranjit Ajit Singh said the SC was in the final stages of formulating the blueprint, which would be launched by the first half of the year and the action plan rolled out over five years. First announced by Prime Minister Datuk Seri Najib Razak at Invest Malaysia in April last year, the action plan aims to chart the medium- and long-term strategic direction for the industry as well as map out strategies to strengthen the country’s Islamic capital market.

SC Report 2015: Islamic fund and wealth management blueprint to be launched in 2016

The Securities Commission Malaysia (SC) will launch the Islamic fund and wealth management blueprint sometime this year, in a bid to firmly establish Malaysia as an international Islamic capital market centre. The blueprint, which is formulated by the SC, will chart the medium to long term strategic direction for the industry as well as map out strategies and recommendations to strengthen Malaysia's competitive edge, said the SC. The strategies are expected to reinforce the industry's sustainability and will include, among others, strengthening global capabilities of market intermediaries and seizing new market opportunities.

Demand for Islamic wealth management keeps growing

Growing demand for asset-based investments in times of fiscal insecurity in major economies in the world and the fact that still only a small portion of the estimated $11.5tn worth of wealth owned by Muslim individuals, institutions and governments is managed by Islamic financial institutions has turned the attention of investors towards Islamic wealth management. According to Malaysia-based International Shariah Research Academy for Islamic Finance (ISRA), there is a lot of potential to tap for Islamic wealth managers: As of the fourth quarter of 2015, total global Islamic assets under management were "just" $58bn and the number of Islamic funds worldwide stood at a meagre 1,053. This compares to $56.4tn of wealth owned by all high-net worth individuals globally combined and to more than 9,200 investment funds in the US alone.

Banking on wealth

There are nearly 500,000 high net worth individuals (HNWIs) in the GCC alone; these clients hold roughly $1.7 trillion of assets. A large majority of them are Muslims. If you look at the larger banks, be it in Switzerland, or in other established jurisdictions, it is mainly in the conventional banking space that wealth management solutions are offered to clients. The low oil prices have had an impact on liquidity and the cost of funds. As the demand for Islamic wealth management solutions is primarily from the GCC region and the sentiments in the region are weak due to the low oil prices, investors could take the wait and watch approach.

The curious case of Islamic wealth

Islamic banking and finance (IBF) is swiftly growing in countries outside the Organisation of Islamic Cooperation (OIC) block, especially in the United Kingdom. The global Islamic financial services industry attained the size of $2 trillion by the end of 2015. Islamic banking segment, which accounts for 75%, dominates the industry. Sukuk, although much talked about, is only 15% of the total Islamic financial assets. Islamic fund management segment, albeit a small component, is slowly developing. Takaful and microfinance, on the other hand, have yet to attain any significant level of development.

Labuan IBFC recognised as leading global Islamic wealth management centre

Labuan International Business and Financial Centre (Labuan IBFC) has been recognised as a leading Islamic wealth management centre. In a statement today, Labuan IBFC said close to 55% of all respondents regarded it as a leading Islamic wealth management provider in a survey by London-based Edbiz Consulting. The survey, which reached more than 10,000 respondents globally, was aimed at assessing the knowledge, attitudes and practices towards Islamic wealth management in order to better understand the demand for Shariah compliant wealth management services within the investing community and their clientele. The research was part of the co-branded Islamic Wealth Management Report 2016, which was launched recently.

Taxation Issues in Islamic Wealth Management

Mohammed Amin wrote a chapter for the "International Wealth Management Report 2016" published by Edbiz Consulting Ltd. The chapter titled "Taxation Issues in Islamic Wealth Management" outlines some generic taxation issues that need to be taken into account in the provision of Islamic wealth management services, and provides specific illustrations of how they are dealt with in one jurisdiction with a relatively advanced system for taxing Islamic finance, the United Kingdom, to provide some pointers as to how other jurisdictions should treat those issues. However it does not attempt to survey the tax treatment in other jurisdictions.

Bahrain's Islamic finesse

Bahrain was for decades regarded as the financial centre of the Middle East, but it was hard hit during the recession and is arguably still picking up the pieces.
The Gulf state expects to run a budget deficit of more than $3.8bn this year and has proposed a string of policy reforms, including axing millions of dollars of food, fuel and other subsidies, to help it rebalance the books.
Despite this, its leaders claim Bahrain has “passed the stress test” of the past years’ fiscal woes and is bouncing back as a financial hub.
The number of finance institutions in Bahrain has grown steadily over the years to around 400 (from 190 in 1991) and work has recommenced on the $1.3bn Bahrain Financial Harbour scheme, which houses the country’s stock exchange and high-profile tenants such as Gulf Finance House and BNP Paribas.

The IFSB Announces the Second Release of Prudential and Structural Islamic Financial Indicators (PSIFIs) for 16 Member Countries

The Islamic Financial Services Board (IFSB) is pleased to announce the second dissemination of its Prudential and Structural Islamic Financial Indicators (PSIFIs) from 16 member countries. The PSIFI data, which aims to provide data on the financial soundness and growth of the Islamic banking systems in participating IFSB member jurisdictions, covers the quarterly data from December 2013 to December 2014.
Secretary-General of the IFSB, Mr Jaseem Ahmed stated that "The support of multilateral organisations - such as the IMF, ADB and IDB - have greatly assisted the progress on this project. It is our aim to continue to expand the scope of the PSIFI to include the participation of new jurisdictions, as well as expansion of data to the Islamic capital market and Takaful sectors of the industry".

Land deals accounted for 89 % of the total at SAR26.3bn

The value of real estate deals declined since mid of October 2015 until the middle of the current month by 24 per cent to SAR29.6 billon compared with the same period last year, recent data shows.
According to data issued by the Saudi Ministry of Justice, real estate deals divided between residential and commercial, witnessed a fall in residential deals by 36 % to reach SAR18.6bn, while commercial deals rose by 8 % to SAR11bn.
Real estate land deals accounted for 89 % of the total at SAR26.3bn, reports Al Riyadh Newspaper.
Riyadh was the most active city in terms of residential real estate deals with a value of SAR 6.2bn, down by 28 % YoY, followed by Jeddah with SAR3.7bn, down by 13 %. In terms of commercial deals, Riyadh came in first place with SAR4.9bn and a rise of 18 %.

GCC wealth management demand grows as expatriates stay longer

The average length of expatriates stay in GCC countries, counting in all major expatriate groups such as Western, Arab and Indians, exceeds 10 years and this group forms a major target market for asset managers, according to Invesco’s sixth annual Middle East Asset Management Study. The Invesco survey of asset managers showed that contrary to popular belief, the average stay of various expatriate groups in GCC countries are longer, with non-resident Indians (NRIs) exceeding 15 years. In summary, there was a strong consensus that the number of GCC-based retirees would increase from all expatriate segments if GCC governments changed the immigration rules and encouraged retirees.

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