IslamicFinance.de

Nicholas Kaiser, chairman of Saturna Capital Corp., has been managing the shariah-compliant Amana Funds which target Muslim investors in the U.S. since 1994. Mr. Káiser can't invest in companies that derive a significant part of their business from activities unacceptable to the principles of Shariah law. Another challenge is managing his cash because earning interest is prohibited. He currently holds 4.3% of the fund's assets in cash. The fund has a 10-year average annual return of 12.2%. It now has $2.2 billion in assets, and Mr. Kaiser estimates that only about 10% to 12% of investors in it are Muslim.

QInvest has revealed plans to launch at least 30 Islamic funds over the next three years on a managed account platform which it introduced this week. QInvest hopes to attract an investor base beyond the Gulf through its Cayman-domiciled funds. Four Islamic funds already exist on QInvest's platform which focus on international equities. All of the funds are actively managed and the focus is on delivering strong returns over the mid- to long term, without focusing on a specific benchmark, according to Ataf Ahmed, head of investment solutions at QInvest Wealth Management.

The Arab League yesterday approved a Qatari proposal to set up a $1 billion fund for Arab East Jerusalem, which Palestinians want as the capital of an independent state under any peace deal with Israel. Qatar's Emir Shaikh Hamad bin Khalifa Al Thani, said his country will contribute $250 million to the fund which will be managed by the Islamic Development Bank. The Fund is to finance projects and programmes that will maintain the Arab and Islamic character of the city and reinforce the steadfastness of its people.

Mark Mobius will lead the Templeton Shariah Asian Growth Fund that is to be launched at the end of this month by investment house Franklin Templeton. The initial seed capital of the fund is $5mn. Mobius expects the sector to grow significantly in the coming years. Franklin Templeton is also launching a Global Sukuk Fund, with $20mn of seed money to invest in Islamic bonds, and a Shariah Global Equity Fund, with $5mn of initial capital.

Falcon Private Bank is planning to launch a fund early next month that will invest in global sukuk.The fund will be offered to the bank’s clients and could grow to $500 million, according to Zafar Khan, Falcon’s Mena chief executive. There is alreade substantial demand from the bank's clients for global sukuk investments, he added. He also considers the yields of the past two years dislocated and the current yields more realistic to the underlying risk.

The Arab Petroleum Investments Corporation (Apicorp) has set up a $150 million fund aimed at leveraging growth opportunities in the petroleum product tanker charter market. It is the first investment fund to be established by Apicorp and also the first fund in the region aimed at a specific vessel category. The fund has acquired five medium range petroleum product tankers and these will be employed in the regional and international tanker market for five years to help meet the projected upsurge in demand for petroleum product carriers. The fund is co-managed by Tufton Oceanic.

Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia, reported a 24.3% jump in the net value of its investment portfolio in 2012, a profit before taxes of 2.1 billion ringgit, and a dividend payout to the Malaysian government of 1.0 billion ringgit. Khazanah cited its property development investments in Malaysia as well as initial public offerings by portfolio companies IHH Healthcare Berhad and cable-TV network Astro Malaysia Holdings Berhad as factors contributing to its annual gains. In a separate announcement, Khazanah and Sun Life Financial Inc. announced plans to acquire insurance joint ventures CIMB Aviva Assurance Berhad and CIMB Aviva Takaful Berhad for C$586 million (US$594 million) from Aviva PLC. The deal is expected to close during the first half of 2013.

Shariah-compliant exchange-traded funds (ETFs), which provide low-cost exposure to conventional equity markets while strictly adhering to Shariah investment principles, are benchmarked to indices that apply a series of trade activity and financial screens to weed out non-compliant companies. The screening process is typically overseen by leading Islamic scholars and results in a portfolio of securities in adherence with Shariah law. The major difference compared to conventional indices is the application of financial/leverage screens. By excluding companies with high levels of debt, the resultant portfolio has lower financial risk and superior credit fundamentals.

The first Sharia-compliant fund will be introduced in Oman by Vision Investment Services. All financial instruments of the fund are in compliance with Sharia principles and policies. It is the perfect tool for conventional investors who are seeking capital appreciation with lower risk.

La Française AM created several OPCI funds, including one OPCI Charia for the account of one of the largest Islamic banks and financial institutions of Kuwait.

Due to the growing number of Shariah-compliant funds in Luxembourg, four companies have launched the service ALIF (Alliance for Luxembourg Islamic Finance) which offers administration and custody of Islamic funds in a Shariah-compliant manner. The service includes legal work and Islamic Finance expertise. The portfolios and processing of the funds registered by ALIF will be periodically reviewed by the Shariah Supervisory Board of Amanie Advisors.

Genghis Capital, the investment arm of Chase Bank is planning to launch a Shariah-compliant unit trust called the Iman Fund in Kenya next month. The Fund is aimed at Muslim investors with an entry level for investments of minimum 500 Kenyan Shillings ($5.78).

Sharakah is Oman’s fund that supports prospective entrepreneurs in the establishment and running of their own businesses in the Sultanate. It provides capital and assistance in order to develop the SME sector and generate job opportunities. So far, Sharakah has supported more than 50 businesses in 13 years. It also regularly takes part in exhibitions, among which the annual Small and Medium Enterprises (SME) Exhibition and Conference aiming to help it reach out to budding entrepreneurs.

NCB Capital has launched AlAhli Global Natural Resource Fund aiming to enrich investment portfolios with natural resources due to rising demand for those in emerging markets. Investors are given the opportunity to achieve capital growth by investing primarily in the listed shares of international companies that are involved in the natural resource related sectors. AlAhli Global Natural Resource Fund is a Shariah-compliant fund denominated in US Dollars with a minimum subscription amount of $2000, managed by investment professionals.

The banking facilities of the Al Aqsa Foundation with two banks in South Africa have been recently suspended. Even though the foundation is registered with the South African government as a bona fide charity, it is suspected by the US government to be covertly funnelling funds to Hamas. First National Bank (FNB) gave a notice to the foundation three months in advance before completely shutting its account. The move encountered rather negative reception from the South African Muslim community. It was even called for a boycott of FNB. There have been further discussions on the reasons to close the account and the relations between the bank and the US government.

According to a recent report, the African Charitable Society for Mother and Child Care has signed an agreement which allows access to USD 100,000 from the Islamic Solidarity Fund. The Palestinian fund serves the purpose of elevating the living standard of Muslim people around the world. The money will be used for the establishment of 225 microfinance projects which will support widows and poor women in the outskirts of the capital city of Khartoum. No information is available on whether the financial help is a loan or a grant.

A Gulf investment bank has provided sharia-compliant funding worth millions of dollars for a Brazilian sugar and ethanol maker. The deal is an example of how smaller firms can be considered new investment possibilities for the wealthy Islamic lenders of the Gulf region. The deal is brokered by Abu Dhabi Equity Partners and will ensure financial means for an unnamed chemical alcohol producer in the Brazilian state of Mato Grosso do Sul. This will be at the same time a three-month investment opportunity for the lending company.

The Alliance for Luxembourg Islamic Finance (ALIF) will ensure Shari’ah-compliant custody and administration service at the time that total assets under management reach estimated $5.3 billion with growing number of Middle East investment funds. Luxembourg is fifth in the rating of Shari’ah-compliant funds worldwide. Already 41 egulated Shari’ah-compliant investment funds are based in Luxembourg. Four companies are uniting in order to establish a specialised platform that will service Shariah-compliant investment funds. These companies are Amanie Advisors, ADEPA Asset Management, Theisen Law, and KBL European Private Bankers. The joint venture will be known as Alliance for Luxembourg Islamic Finance (ALIF).

The Egyptian General Petroleum Corporation (EGPC) received $265 million of funds from the International Islamic Trade Finance Corporation (IITFC). Since October 2012, the money provided to the EGPC from the IITFC has almost reached the $500 million mark. The funds are intended to help the state to secure a larger number of basic goods and other necessities for its citizens. The initiative includes petroleum products, wheat and other foodstuffs.

Gambia will receive a grant of US$20.28 million from the International Fund for Agricultural Development (IFAD) to use for improving livelihoods of smallholder farmers. Particular attention will be paid to rural women and youths in the country. Minister for Finance and Economic Affairs Abdou Kolley and president of IFAD Kanayo F. Nwanze signed the financing agreement for the National Agriculture Land and Water Management Development Project. Agriculture is a sector of significant importance in Gambia since it employs more than 72% of the population and contribuets about 30% to the gross domestic product.