Americas

MICROCAPITAL BRIEF: Blossom Finance Launches Shariah-compliant #Microfinance #Fund to Invest in BMT Microfinance Institutions in #Indonesia via PBMT Ventura

US-based Blossom Finance recently launched a fund that will lend local-currency on the Indonesian island of Java via Permodalan BMT (PBMT) Ventura. Baitul Maal wat Tamwil (BMTs) are financial institutions that follow Shariah law. They provide savings and loan services primarily to people who do not use traditional banks. The new fund is Blossom’s first microfinance fund that is open to investment from the public. The minimum investment is USD 1,000, although US-based investors must be accredited before participation. Blossom is accepting investments into the fund in US dollars as well as the cryptocurrencies Bitcoin, Bitcoin Cash and Ethereum. In testing its platform since 2015, Blossom has generally returned investors annualized profits around 7% with terms of 6 to 12 months.

Gotta Have Faith: A Biblically Responsible #Investment Strategy

There are several ways for financial advisors to diversify an investment portfolio. For example, the James Biblically Responsible Investment ETF (JBRI) tries to reflect the performance of the James Biblically Responsible Investment Index. Indexing methodology screens out or excludes companies engaged in activities that are objectionable from a biblical perspective. This type of indexing methodology is a subset of the broader socially responsible investing branch of investments where investors try to achieve profitable investment goals while still adhering to one's principles. According to James Investment Research, JBRI is constructing a portfolio comprised of the most attractive stocks meeting Christian principles and criteria. The fund can be used as a core equity holding, an ESG option, or as a Smart Beta holding.

Call for Good Practices on Islamic Finance and Impact Investing Activities

Click here to apply http://bit.ly/2tN5RAZ

Purpose of this call is to invite private and public sector to share their good practices on
•Islamic finance funded impact investments and dedicated vehicles
•impact investment vehicles in the OIC region
•Islamic social finance vehicles

for the mapping study that is being carried out under the Global Islamic Finance and Impact Investing Platform (GIFIIP). The selected cases will be analysed by the research team managed by IICPSD and IRTI. Subsequently the good practices, information on vehicles and further findings will be published as part of the study.

Investment Focus

Margin #debt is at a record high in #US markets

According to the US Financial Industry Regulatory Authority, investors have borrowed a record $642.8 billion against investment portfolios. The leverage from this margin debt is a bid to increase returns, but it leaves investors vulnerable if asset prices decline. There was a market correction in February, but the question remains whether the recent correction was a one-off event. Either way, this is where the Federal Reserve has to be concerned about financial stability. When the credit markets become an integral facet sustaining asset markets, a sustained fall in asset prices can boomerang back onto the financial system.

#Iran May Follow #Venezuela In Launching Its Own Cryptocurrency

Iran has announced its intent to establish a national cryptocurrency. Mohammad-Javad Azari Jahromi, head of Iran's Ministry of Information and Communications Technology, posted in a Tweet that a test model for a cloud-based digital currency is being developed. The announcement comes after Venezuela's oil-backed "petro" cryptocurrency launch earlier this week. Venezuelan President Nicolas Maduro claims that the cryptocurrency has raised over $700 million. There are fears that the rise of state-backed cryptocurrencies could challenge international efforts to regulate financial transactions and impose sanctions. The three countries most interested in the technology, Iran, Venezuela and Russia, are all targeted by U.S. sanctions.

CIBAFI and The World Bank presenting study on "Corporate Governance Practices in Islamic banks 2017"

It is well established that good corporate governance strengthens institutions and financial sectors, and in so
doing contributes to building strong economies and economic growth.

Deficiencies in corporate governance were among the factors that contributed to the global financial crisis
(GFC) of 2007–08. As a result, global standard setters such as the Basel Committee on Banking Supervision
(BCBS) and the Organisation for Economic Co-operation and Development (OECD) have been updating and
strengthening their guidelines on good governance practices.

The Islamic Financial Services Board (IFSB), which sets standards for Islamic financial institutions, published its
Guiding Principles on Corporate Governance in 2006 as its standard IFSB-3. The Principles address, within the
context of corporate governance, the distinct features of Islamic banks, such as the different relationship that
they have with some of their stakeholders.

More:

Three Reasons Millennials Should Choose An Islamic Home Finance Provider

There are three main reasons millennial homebuyers should work with an Islamic home finance provider. The first reason is less debt, less stress. Guidance Residential’s Declining Balance Co-ownership Program is a smart, low stress way to grow home owners’ equity and achieve the American Dream. Shariah principles ensure that both parties enjoy the benefits of a transaction without exploitation by either party. Secondly, faith and finance can go together. Guidance Residential’s home finance program was developed under the supervision of leading scholars of Islamic finance and with federally mandated institutions like Freddie Mac. Thirdly, social justice is a concern for many Muslim-American communities in the U.S. Islamic home finance provider programs have always avoided the speculative and unfair practices that were prevalent in the housing market. Since its inception in 2002, Guidance Residential has grown to provide over $4.6 billion in home financing and is the largest Islamic home financing provider in the U.S.

US$50m of i-VCAP Islamic ETF expected to be subscribed

i-VCAP Management is expecting US$50 million (RM198 million) to be subscribed upon its initial subscription period via an initial public offering on Feb 9. The MyETF-US50 will be the first US dollar-denominated Syariah-compliant security to be listed on Bursa Malaysia. i-VCAP CEO Khairi Shahrin Arief Baki said ETFs are one of the fastest growing investment products in the world. The MyETF-US50 is aimed at providing investment results that closely correspond to the performance of the benchmark index, the Dow Jones Islamic market US Titans 50. According to i-VCAP chairman Tuan Haji Rosli Abdullah, the MyETF-US50 enables investors to access the US equity market in US dollars, marking a new chapter in the Malaysian capital market.

Wahed Invest: a Sharia-compliant #investment #robo-adviser

Robo-advisers are opening up investment advice to the masses. They can provide sound investment advice for a fraction of the cost of their human counterparts, making it affordable enough for those with as little as US$100 to invest. Junaid Wahedna has taken the robo-investment concept a step further, making it available for those looking for Sharia-compliant investment options. Wahed Invest charges far lower fees than those charged by a conventional wealth manager. The robo-advisor Betterment has accrued over $10 billion worth of assets under management in the US since its launch in 2008. Currently, all of Wahed’s clients are from the US and Mr Wahedna says it plans to start accepting international customers. The company has 50 full-time employees and it has offices in New York, London, Dubai and Mumbai. The company sees a lot of potential in India, having seen strong demand for Islamic investing in the country from its pre-registered clients.

#Bahrain-headquartered investment firm buys controlling stake in Mentor-based MC Sign

Bahrains's Arcapita has acquired 75% interest in Mentor-based signage and lighting services firm MC Sign. The deal is worth more than $100 million. Atif A. Abdulmalik, Arcapita's CEO, said the company was well positioned to acquire market share in a highly fragmented industry that is dominated by locally-focused, sub-scale service providers. Arcapita's investment in MC Sign reflects the firm's global presence, with offices in Bahrain, Atlanta, London and Singapore. The investment firm has been active in the Middle East too. In October 2017, the firm partnered with Bahrain's sovereign wealth fund Mumtalakat to acquire 90% stake in Abu Dhabi's NAS United Healthcare Services. This was preceded by another deal through which Arcapita acquired logistics assets worth $150 million in Dubai.

#Venezuela to issue oil-backed #cryptocurrency in ‘coming days’

President Nicolas Maduro announced that Venezuela would issue 100 million units of an oil-backed cryptocurrency known as the petro. Maduro said that the petro would be backed by 5 billion barrels in the Ayacucho block of the Orinoco Oil Belt. Based on the latest price of the country’s oil basket, the total issue would be worth about $5.9 billion. Maduro believes the cryptocurrency will help the South American country challenge the tyranny of the dollar, economic war and US-led financial persecution. Over the past year, the US Treasury Department has blacklisted numerous top-ranking officials, including Maduro and many of his ministers. Home to the world’s largest crude reserves, Venezuelan oil output fell to a 14-year low last July. Maduro didn’t comment on whether Venezuela bondholders would be paid with petros. At the start, the petro will be obtained through auctions or direct allocation by the country’s Cryptocurrency Superintendent.

Trustbank Amanah, the first Islamic Bank in #Suriname and region, to play an important role in the development of entrepreneurship and economic growth

Islamic banking has made its entry in Suriname with the approval of the Central Bank of Suriname for Islamic products and services in the banking sector. The official opening of Trustbank Amanah, the first Islamic Bank in Suriname, took place on Thursday 7th of December 2017. Trustbank Amanah aims to develop, support and encourage Small and Medium Enterprises (SMEs) in accordance with Islamic Finance principles. After the official launch of Trustbank Amanah, a Memorandum of Understanding (MoU) was signed with the Ministry of Trade, Industry and Tourism and the Association for Surinamese Business (VSB) to stimulate, support and develop local SMEs.

#American University Offers Graduate #Certificate in Islamic Finance

American University is offering a graduate certificate in Islamic Finance to prepare professionals for both emerging and established markets. The curriculum includes courses that focus on the role of Islamic finance in the global economy and Islamic capital markets. For Ghiyath Nakshbendi, an executive at American University, the graduate certificate is a dream come true. He regularly brings in experts to speak to classes. Speakers who visit and Skype in include CEOs, lawyers and high-profile Islamic finance professionals from Kuwait, Qatar and Bahrain. Nakshbendi does not want finance professionals to be deterred by the "Islamic" in Islamic finance. Students enrolled in the certificate program come from a variety of backgrounds and religious traditions. He believes that the program will help redefine the way professionals do business.

Muslim mortgage kingpin led investigators on 'treasure hunt' for missing gold: Crown

In Toronto the trial begins for Omar Kalair, accused of pocketing millions in 'Shariah-compliant' mortgages. The businessman not only pocketed millions in fraudulent mortgages, he also purchased over $2 million in gold and silver bullion. Kalair was helped by Yusuf Panchbhaya, the chairman of a board of religious advisers who issued fatwas sanctioning the businesses mortgages as Islamic. Kalair and Panchbhaya have both pleaded not guilty to the charges which include theft over $5,000, fraud over $5,000 and laundering the proceeds of crime. While technically interest-free, Kalair charged a fee to his clients at a sum higher than what borrowers would usually pay at market rates. Kalair first disappeared, then turned himself in in March 2014. The precious metals would end up in the hands of Joseph Adam who was designated by Panchbhaya as the Shariah board's manager of finance. Panchbhaya returned the silver to the court, but almost $2 million in gold is still missing. If convicted, the pair could face a maximum sentence of 14 years in prison.

Guidance Residential CEO Talks #Fintech

The strategy of 'technology first' and the automation of everything is not how businesses usually start. The traditional barriers have been human and financial capital, as well as various regulatory barriers. Fintech starts with anyone’s business and applies a 'technology first' approach to that model. Islamic finance in the US has taken hold. There are several institutions offering Islamic financial products. They all have websites, a comprehensive online foundation and a robust social media presence. That used to be enough once you have overcome the traditional barriers to entry, but that is no longer the case. Experts predict that in the near future, no enterprise will succeed and flourish without the right fintech services in place. Guidance Residential, a leader in the US Islamic home financing market, was among the first to identify the trend and face that challenge.

Ibdar Bank and partners acquire Boston office building for $48mln

#Bahrain-based Ibdar Bank has acquired a prime office building in Boston, USA. The deal is a collaboration with US property manager Lincoln Property Company and asset manager Ritz Banc Group and the total size is $48 million. The Boston property is a single-let building leased to Amazon Robotics, a wholly-owned subsidiary of Amazon Inc. The area is regarded as the "technology corridor", and is home to many well-known technology-related companies making it the epicentre of robotic innovation. The bank’s head of real estate, Bassam Kameshki, said the Boston metropolitan area has witnessed substantial growth within the technology and medical sectors. He ensured that Ibdar Bank will be working to add further value to the property and ensure a profitable exit scenario.

Toronto-Based Wealthsimple Launches Shariah-Compliant Portfolio

#Canadian Wealthsimple Financial introduced a Shariah-compliant portfolio to expand its product offerings in an increasingly crowded robo-adviser market. According to co-founder Michael Katchen, Wealthsimple’s Halal Investing portfolio is aimed at setting the company apart from its peers. He expects the portfolio’s interest to closely mirror the company’s socially responsible products. Wealthsimple’s fees are a flat 0.5% for the first $100,000 invested and drop to 0.4% on any additional investment. Privately held Wealthsimple has raised 100 million Canadian dollars ($79.6 million) over several funding rounds over the past three years led by a subsidiary of the Power Corporation of Canada. Katchen said he expects to tap another round of venture funding before seeking an initial public offering.

Business #schools feed hunger for courses on Islamic finance, aboriginal leadership

As the world of business is global, business schools are getting similarly global in their outlook. The need for a more diverse approach in business schools crosses all levels, from the makeup of faculty and the curriculum to the students themselves. Walid Hejazi, associate professor at University of Toronto’s Rotman School of Management stresses that diversity from a business school perspective is not so much a moral or equity imperative as it is about long-term sustainability. In his view, businesses that are diverse in their workforce are not only more innovative, they also work more effectively. Other business schools are following suit emphasising diversity on all levels. For example, the Beedie School of Business at Simon Fraser University introduced an Aboriginal Business and Leadership EMBA program to advance aboriginal leaders’ business education.

Gassner's picture

Bitcoin Mania versus Tulip Mania?

Dear Reader,

regular readers may remember my critic on bitcoin from an Islamic perspective missing intrinsic value. The former blog entry you find here: http://www.islamicfinance.de/?q=node/7840 - almost two years ago.

So far bitcoin just went up higher and higher, with wild fluctuations but nevertheless.

It reminds on how bubbles work, think about the tulip mania in 1637 a nice piece of economic history. A single tulip bulb was traded and bought on credit. Check the Wiki page on it:

https://en.wikipedia.org/wiki/Tulip_mania

As bitcoin has even less value than a tulip except for payment purposes, it is the payment functionality, which can lead to destruction. What happens if a new alternative currency is becoming en vogue, which has a better usability and faster transaction time? In my view this is most likely trigger to burst the bubble.

FT Alphaville covers now the difficulties coming up with bitcoin's increasing transaction numbers causing inconvenience in using the digital currency:

https://ftalphaville.ft.com/2017/05/17/2188961/the-currency-of-the-futur...

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