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Cryptocurrencies and Islamic finance?

Bitcoin (https://bitcoin.org) started to make the idea of a cryptocurrency popular. What is missing so far is an intense discussion among Sharia scholars.

What makes Bitcoin unique is, that it is a) created by a computer program b) that it is created and verified by a decentralised process, the so-called 'Blockchain' technology (https://en.wikipedia.org/wiki/Block_chain_(database)), which is solving a practical problem for the first time: To enable trust and accounting without a central ledger, such as a central bank. c) that it faciliates payments quick, efficient and discreet - while the latter leads to accusation of misuse, e.g. for gaming, drugs, terror finance etc.

How it can be seen from an Islamic perspective is not widely discussed, despite it deserves the attention. What we find in search engines are some discussions and also an initiative, which calls itself a bank (https://bitcointalk.org/index.php?topic=21732.0).

Buyout firm Arcapita sells $640m US real estate portfolio

Bahrain-based Islamic investment firm Arcapita said on Wednesday it had sold its real estate portfolio of retirement communities across the United States to NorthStar Healthcare Income Trust for $640 million. The portfolio includes 16 facilities and 4,000 residential units for continuing senior care. Net operating income from the portfolio grew by 41 per cent between 2010 and 2014, despite a slump in the U.S. housing market following the 2008 financial crisis. Abdulmalik said the firm has given $3 billion in exit proceeds to its investors in the last two years but did not give a breakdown of profits for its real estate portfolio exit. In November, Arcapita completed a $100 million fundraising, a little over a year after emerging from Chapter 11 bankruptcy.

Buyout firm Arcapita sells $640 mln U.S. real estate portfolio

Bahrain-based Islamic investment firm Arcapita said on Wednesday it had sold its real estate portfolio of retirement communities across the United States to NorthStar Healthcare Income Trust for $640 million. The portfolio includes 16 facilities and 4,000 residential units for continuing senior care. Net operating income from the portfolio grew by 41 percent between 2010 and 2014, despite a slump in the U.S. housing market following the 2008 financial crisis. Abdulmalik said the firm has given $3 billion in exit proceeds to its investors in the last two years but did not give a breakdown of profits for its real estate portfolio exit. In November, Arcapita completed a $100 million fundraising, a little over a year after emerging from Chapter 11 bankruptcy driven by debt repayment difficulties.

Financial ups and downs don’t hurt just the poor

A new report from JPMorgan Chase’s research arm examined the deposit and spending patterns of 100,000 of its 27 million accounts during 2013 and 2014. It found that almost all the customers in the sample experienced changes in income and spending of 5 percent or more a month — not a tremendous fluctuation by any measure. But over the course of the year, 26 percent experienced income changes of 30 percent or more —10 percent suffered declines, while16 enjoyed increases. Income and consumption changes didn’t move in tandem. Just 28 percent of the survey subjects spent more money when they had more, and less when they had less.

When Will Our Justice Department Jail the Criminal Bankers?

Big-time criminals engaging in major financial crimes that effectively involve the theft of billions of dollars from the public aren’t being prosecuted. Today we learned of yet another huge settlement by five of the largest banks operating in our country. The list includes JPMorgan Chase, Citigroup, Barclays, the Royal Bank of Scotland UBS. Each of these banks admitted to engaging in criminal activity. But banks don’t commit crimes. People working for banks commit crime. And when people working for banks commit crime, it’s the responsibility of our Justice Department to indict them.

Islam Meets Wall Street

Demand for Islamic financial products has increased over the last decade—not just in the Gulf and Southeast Asia, but also in America. There are 5.7 million Muslims in the U.S. with $98 billion in disposable income, according to a report by DinarStandard, and many are looking for Sharia-compliant investments. But for many advisors in the U.S., it’s a peculiar market because not a lot of financial experts have expertise in Sharia law. Deals often involve multiple layers to enable them to be Sharia-compliant, and that can lead to added costs, such as double taxation. But one of the biggest issues is the diverging opinions about what makes investments Sharia compliant.

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Short European fixed-income trade. A loss of a lifetime?

Bill Gross, well known fixed income fund manager twittered (https://twitter.com/januscapital/status/590519759797530624) and moved markets with his idea to sell German sovereign bonds short (selling without having them) to buy them back later cheaper. He called it "The Short of a lifetime"; the only issue would be the "timing"...

Interest rates will be once raising again but will short seller stay solvent long enough to benefit? The German economy is doing fine, but other EURO zone countries do not perform as well and need low interest rates for a prolonged period of time. Japan has so far not convincingly ended their easy money policy.

The Beginner's Guide to Halal RRSP Investments

With the registered retirement savings plan (RRSP) deadline on March 2nd, many Canadians are wondering and worrying about where to invest their money. An RRSP is registered with the Canadian government. In effect, it's a special bank account used to save up for retirement. This account is made up of investment products, such as stocks, bonds, and mutual funds that allow savings to grow over time. It's up to individuals to choose what investment products to have in their RRSPs. Unlike regular investment accounts, money inside an RRSP is tax-sheltered, meaning that it doesn't get taxed like regular income or investments. The challenge for Canadian Muslims is to know the nature of their investments to ensure their investments are halal.

Azzad Asset Management Becomes 1st Islamic Financial Firm to Join Interfaith Center on Corporate Responsibility

Representatives from the Interfaith Center on Corporate Responsibility (ICCR) and Azzad Asset Management have announced that Azzad will join ICCR as its newest member—the first Islamic firm to be affiliated with the group. As a member organization focused on corporate social responsibility and environmental advocacy, ICCR leverages the influence of its shareowner members to enact change. The two organizations expressed optimism about the opportunities this collaboration affords. Azzad representatives reportedly hope to bring a fresh, Islamically inspired perspective to the many corporate and social issues confronted by ICCR.

Saturna Capital Launches Two Funds Emphasizing Sustainability

Saturna Capital Corporation (Saturna) has announced the launch of the Saturna Sustainable Equity Fund (SEEFX) and the Saturna Sustainable Bond Fund (SEBFX), two mutual funds that will invest globally in securities of issuers rated by Saturna as low risk in the areas of the environment, social responsibility, and governance (ESG). Saturna expects the funds will appeal to the growing number of investors who seek to incorporate sustainability and social responsibility into their investments, particularly retirement portfolios. The Saturna Sustainable Equity and Bond Funds will be available on major platforms such as National Financial Services (Fidelity), Charles Schwab, Pershing LLC, and TD Ameritrade.

American banks are missing out on the hot Islamic finance market

Islamic finance is surging across the globe, gobbling up an ever-increasing share of the more than $220 trillion in international assets outstanding. That is, everywhere except in the US and Canada. A combination of regulatory hurdles, a lack of proper rules and standards, and general Islamophobia can be blamed. Another hurdle is the requirement that US banks keep their risk ratios fairly low. In order to be compliant while also maximizing profit, banks usually invest in the huge supply of fixed-income securities such as treasuries and conventional corporate bonds, which are prohibited by Islamic laws. Despite the challenges, both the US and Canada are a natural fit as homes to the bustling and dynamic Islamic finance industry.

Maine lacks loan options for Muslims looking to start businesses, buy homes

Although many states with large Muslim populations have set up businesses to offer alternative financing products that comply with Islamic law, no such companies exist in Maine. That means no credit cards, no mortgages, leaving little opportunity for Muslims in Maine to establish credit or participate in certain aspects of the state’s economy. Several organizations that assist immigrants and refugees in Maine have convened to examine the problem, which they say is holding back economic growth in some of the state’s most depressed areas. Despite those challenges, a surprising number of immigrants and refugees are starting businesses and creating jobs by relying on alternative financing methods such as borrowing from friends and family

Islamic Teaching On Usury Kills Property Tax Exemption In Tennessee

The Islamic Center of Nashville is listed as being a church meaning it qualifies for a property tax exemption. Only ICN did have a problem with its property tax exemption. When ICN decided to finance a school it deeded property to Devon Bank, which paid for the construction. ICN leased the property and bought it back over time from the bank. So even though the religious use of the property had not changed, it was no longer owned by a religious organization and hence for a period of time did not qualify for property tax exemption. ICN was asking for the exemption to be retroactive three years. However, the Tennessee State Board of Equalization ruled against ICN.

Shari’ah consultancy RAQABA issues its first audit in the US

RAQABA signed an agreement for an independent external Shari'ah audit with American Finance House (Lariba) in the second half of 2014. RAQABA issued the first Shari'ah audit report in the United States after a professional work continued for several months in an examination of the structures and procedures for LARIBA’s home financing model "Declining Participation in the Usufruct (DPU)". American Finance House (LARIBA) was founded in 1987 in Pasadena, California in the US. The main objective of this company is interest-free financing for all segments of society, by leasing or participation through specialized products in home financing, commercial property financing, auto financing, and equipment financing.

How advisers can help Muslim clients invest with faith

U.S. advisers who are not alert to the special investing needs of Muslims are missing an attractive segment of the investing populace. The U.S. Muslim population is expected to reach 6.2 million by 2030, almost three times the nation's 2.6 million Muslims in 2010. Muslim-Americans are younger and better educated than the average U.S. citizen. Moreover, they want to see a greater number of appropriate financial products. Meeting their investing needs is similar to working with clients who want socially responsible investments, but it requires additional expertise. But the main point is that advisers can help Muslims get in the market.

Countries with very high religious diversity - including China - outpace world in economic growth

The Weekly Number's analysis of a new Pew Research Center report - a study based on methodology developed by Brian J. Grim - finds that the 12 countries identified in the study as having very high religious diversity each outpaced the world's economic growth between 2008 and 2012.

Full Report: http://www.pewforum.org/2014/04/04/global-religious-diversity/

British Virgin Islands: The Use Of Offshore SPVs In Shariah Compliant Transactions Post-FATCA

In recent years, international financial centers (IFCs) such as the British Virgin Islands (BVI) and the Cayman Islands (Cayman) have faced unprecedented political and regulatory pressure from governments and international organizations to open up and become more transparent in their business practices. The impression is that these jurisdictions are secret tax havens. However, IFCs are more compliant with international regulatory requirements than they are portrayed to be. The benefits of using an entity incorporated in an IFC are such that they will remain vital components of international structures, even in the face of mounting pressure from onshore governments.

US investor backs European Sharia mezzanine fund

An unnamed US investment manager has committed $100m (€80.4m) to a Sharia-compliant mezzanine real estate fund managed by Gatehouse Bank. The closed-end fund, which will invest in western European financings, is the first mezzanine product to comply with Sharia principles. Gatehouse will source, arrange and structure loans up to 85% loan-to-value over the next 18 months. The main principle of Sharia investment involves avoiding assets where more than 10% of the property involves the sale of alcohol, pork or tobacco. With three to five-year terms, the loans are expected to generate net IRRs of between 6% and 10%.

Challenges mushroom for embattled HDG Mansur chief

HDG Mansur is on the ropes, with numerous affiliated companies in bankruptcy, and its principal Harold Garrison himself sought personal bankruptcy last month. Worse Garrison and HDG Mansur are the subjects of a federal criminal investigation into whether they took $5.8 million from a client. Those plaintiffs, two Cayman Islands-based funds, aren’t alone in howling fraud. A year ago, KFH Capital Investment Co. and Kuwait Finance House Real Estate Co. filed a lawsuit in the United Kingdom accusing Garrison and HDG Mansur of misappropriating more than $11 million in connection with a failed development called Finzels Reach in Bristol, England. The court did not go along with a push by creditors to convert the bankruptcy of the HDG Mansur companies from Chapter 11 reorganizations to Chapter 7 liquidations.

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