Islamic fund assets remained flat in 2009

“The Islamic fund industry needs to evaluate new strategies to restimulate growth. Islamic fund assets remained flat in 2009 at $52 billion, whereas the potential wealth pool grew by 20 percent, now estimated at $480 billion,” concludes the Islamic Funds & Investments Report (IFIR) 2010.
The other key messages from the IFIR similarly are stark — the sector needs to achieve scale to ensure its long-term sustainability; the priority over the next two years is to rebuild investor trust through staying close to the investor base and to have transparency in cost and revenue structures.
The IFIR 2010 may serve a purpose to those interested in the Islamic funds industry. But it could have been much more useful if it had clarity in structure; concentration on the 3 major markets by far; in-depth analysis not only of the performances but also of the shortcomings — both regulatory, legal, management, investor knowledge, asset allocation etc; and above all a much more rigorous empirical approach in primary data collection which would have given the analysts at Ernst & Young to draw much more authoritative conclusions about the global Islamic fund and investment industry.

UK firms may opt for sukuks

Corporate sukuks by UK organisations are expected in the coming few months following the recent launching of the first corporate sukuk out of United Kingdom by Gateshead-based International Innovative Technologies, or IIT.
A major GCC-based sukuk arranger, which is reportedly working on a corporate sukuk issuance for a UK healthcare company for the last year, hopes to launch the issuance in September. A London-based Islamic bank is also working on a sukuk issuance for a UK client which is near to being finalised. Tom Wilkinson, chairman of IIT, is confident that there is potential for other UK companies to access Islamic finance including sukuk as an alternative source of funding.
The sukuk issue was placed privately with Millennium Private Equity Ltd, leading private equity firm based in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority. The sukuk is essentially a convertible sukuk, whereby Millennium Private Equity Ltd can convert the sukuk into equity.

Crisis-hit Islamic funds set for recovery

he asset management side of Islamic finance, which has been at a virtual standstill in the $1 trillion industry, is set to break out of its rut as demand rises for investment products catering to Muslim laws.
There are signs that investment managers are slowly moving to tap demand for Islamic products. Qatar First Investment Bank and Gulfmena Alternative Investments last week unveiled plans for a sharia-compliant asset management firm.
Islamic investment products are commonly perceived to underperform conventional asset classes due to restrictions on investment avenues and the overall conservatism of portfolios. But the MSCI World Islamic Index has managed to outperform the conventional MSCI World Index over the last 13 quarters due to its focus on low-debt companies and non-financial stocks.
The global financial crisis added risk aversion to the mix, with institutions becoming shy about investing in new funds.

Hyperion Launches Islamic Equity Fund, Targets Mideast

Australian investment manager Hyperion Asset Management has launched an Islamic equity fund that will initially target Middle East investors seeking to benefit from Australia's economic growth potential.
Hyperion uses a proprietary process to manage a high-conviction portfolio made up of a limited set of stocks that meet strict selection criteria, for Shariah compliance and other business attributes, the company said in a statement.

Islamic banking growth to hit $2.7tr

Abu Dhabi Islamic banking is growing at a fast pace and its size globally is expected to reach $2.7 trillion (Dh9.9 trillion) by 2015. Abu Dhabi Islamic Bank announced the launch of its wealth management service that will cater to the needs of mass, affluent and high net worth customers.
Abu Dhabi Islamic Bank Wealth Management offers a range of investment solutions such as sukuk, equity, treasuries, commodities, mutual funds, real estate advisory, trust, private equity and other Sharia-compliant opportunities worldwide.


Sharia platform created

Allfunds Bank, the business-to-business fund platform, has launched an Islamic Services Unit to comply with Sharia principles. The company, jointly owned by the Santander and Intesa Sanpaolo groups, offers over 80 sharia-compliant funds from asset management firms based in Luxembourg, Ireland, the United Arab Emirates and Saudi Arabia.
The unit has a fatwa endorsed by the Sharia'h Board of Amanie Dubai, a specialist Islamic consultancy firm, making it the first sharia-compliant platform.
Allfunds said its clients would have direct access to the largest available range of Islamic funds and it would take further opportunities to expand the service, such as setting up a dedicated website for the sector.

Alawwal launches SR375m real estate fund

The Saudi joint stock company's focus on the real estate sector stems from the fact that this sector is among the most promising ones in the Kingdom, a team of Alawwal executives told a press conference at Hilton's Qasr Al Sharq hotel on Sunday.
The real estate sector is capable of absorbing more capital injections locally and from overseas. Market studies reveal that the Kingdom requires over 200,000 housing units annually.
To achieve the fund's objectives, the expertise of Ulayya Real Estate Development has been called on. It is one of the pioneers in land development and is represented by Hamad Bin Seaidan who has over 30 years of real experience in the field.
The participation in the fund is open to both citizens and resident expatriates through its head office in Jeddah and branches in Riyadh and the Eastern Province. To facilitate participation in the fund, the company has formed a specialized team and has reached an agreement of cooperation with Samba and the National Commercial Bank.

BLME plans Shariah-compliant fund

Bank of London and the Middle East (BLME), the totally-Shariah based bank, is currently working on the development of a Shariah-compliant Absolute Return Fund. The bank, which has its own Shariah Supervisory Board (SSB), has been doing quite well since opening just three years ago and has been providing Islamic investment and finance services to the 15 million Muslim population in Western Europe, as well as customers in Turkey. Nigel Denison, director and head of asset management, explained that the bank's customer base includes people of all faiths who want a trustworthy place to bank. The bank currently has predominantly Kuwaiti shareholders and would someday like to build a presence in the Kingdom.

[German] - Steuerliche Wuerdigung islamischer Vertragsmodelle - Neuerscheinung im Bankverlag

Steuerliche Würdigung im nationalen und internationalen Kontext

Der Markt Islamic Finance wächst rasant und umfasst bereits heute ein erhebliches Anlagevolumen. Demgegenüber besteht ein großer Kapitalbedarf in der europäischen, speziell auch in der deutschen Realwirtschaft ebenso wie ein Bedarf an Investoren.

Bei der Umsetzung von Islamic-Finance-Vertragsmodellen kann die Besteuerung im Einzelfall eine ausschlaggebende Rolle spielen. Daher erläutert die Autorin in diesem Buch für ausgewählte schariakonforme Finanzierungs- und Anlageformen zunächst die Scharia-Rahmenbedingungen der jeweiligen Vertragsmodelle aus deutscher rechtlicher, ertragsteuerlicher und verkehrsteuerlicher Sicht. Die steuerlichen Fragestellungen werden anhand von Beispielen im grenzüberschreitenden Corporate Bereich im Schnittpunkt von deutschem internationalem Steuerrecht und ausländischem Steuerrecht der weiteren beteiligen Staaten verdeutlicht.


* Einleitung
* Grundzüge von Islamic-Finance-Vertragsmodellen
- eigenkapitalbasierte („Musharaka“ und „Mudaraba“),
- fremdkapitalbasierte („Murabaha“ und „Tawarruq“) sowie

Gassner's picture

Islamic Finance Group on ResearchGATE, the largest social network for scientists!

ResearchGATE is the largest social network for academic research globally. Dedicated social profiles of researchers allow to enter academic careers, published articles in journals and books, announce fields of research for international exchange just to name a few of the features. took another effort to create a dedicated group and invite researchers globally to use this platform and foster research in Islamic finance. The last academic initiative taken was to sponsor and start a full fledged platform for the Islamic Finance WIKI, the online encyclopedia.

Researchers are invited to participate in these initiatives.

Please visit:

Javelin to Shutter Islamic Fund

Javelin Investment Management has announced that its JETS Dow Jones Islamic Market International Index Fund will cease trading on October 19, 2010. Launched on July 1, 2009, the fund failed to attract the level of investor interest that had been anticipated. Marketing efforts for Javelin's second offering, JETS Contrarian Opportunities Index Fund, have proved more successful since its launch in April of this year. Trading under the symbol JCO, the fund consists of stocks that have been identified by Dow Jones as having underperformed in recent years while maintaining relatively strong fundamentals. JETS Dow Jones Islamic Market International Index Fund invests in companies whose principal activities are outside the United States. This creates the risk that currency fluctuations will impact the company's results. Trading on foreign markets often carries the risk that regulatory "circuit breakers" will interrupt trading. Trading practices vary around the world, as do sovereign risk and the possibility of war or civil disturbance. These risks can be more serious in the emerging markets.

Al Hilal Bank Term Arranger in Emirates Steel US$1.1bn Project Finance Deal

Funds will be utilised to finance ESI's capital expenditures for its expansion plans for additional manufacturing facilities. This transaction also comes in line with Al hilals commitment to Abu Dhabi's vision 2030 and supporting the Emirates strategic and vital business initiatives.

Islamic exchange traded funds poised for growth as interest grows

There is huge room for growth in Islamic exchange traded funds with around 1.6 billion Muslims worldwide and $950 billion in assets under the management of the Islamic finance industry, it is claimed. The first Sharia compliant ETF was launched in January 2007 based on a large cap global index from Dow Jones. Since then, other ETF providers have entered the market. Since the first Sharia compliant fund, iShares, a leading provider of ETFs, has also introduced Sharia compliant ETFs that are all currently based on holding physical equities. ‘Private clients’ advisers in conventional banks also report including Sharia compliant ETFs in client portfolios in combinations with actively managed funds and structured products, according to Broadwell, iShares vice president.

Kuwait KIA Rejects Plan To Set Islamic Body To Back Small Projs-Report

The Kuwait investment Authority, or KIA, has turned down a parliamentary proposal to set up a shariah-compliant specialized entity to support small projects by Kuwaiti nationals. The sovereign wealth fund said that it is engaged in undertakings that have been in place for a long time that make creating such entity unnecessary.

Qatar to be largest overseas property investor in 2010

Qatar is expected to be the largest source of real estate capital during 2010, a Jones Lang LaSalle report said. Recent investments - such as the purchase of London department store Harrods in May are likely to be followed by further investments in other markets across Latin America, Eastern Europe and Asia, it said. Qatar's competitive advantage will be helped by the decline in investment from German funds.


S&P: European Finance House Offshore Sharia Fund Assigned 'AAf/S1+' Fund Credit Quality And Volatility Ratings

Press Release

European Finance House Offshore Sharia Fund Assigned 'AAf/S1+' Fund Credit Quality
And Volatility Ratings

LONDON, May 4, 2010--Standard & Poor's Ratings Services said today that it assigned
its 'AAf' fund credit quality and its 'S1+' fund volatility ratings to EFH Funds SCA
SICAV-SIF - Liquidity Subfund (the "subfund"), a Luxembourg-domiciled U.S
dollar-denominated liquidity fund, managed by European Finance House (EFH). This is
the first Standard & Poor's fund credit quality and fund volatility rating assigned
to an offshore Islamic fund.

Fund credit quality ratings generally reflect our assessment of the level of
protection against losses from credit defaults and are based on an analysis of the
credit quality of the portfolio investments and the likelihood of counterparty

Fund volatility ratings generally reflect Standard & Poor's view of the fund's
sensitivity to interest rate movements, credit risk, investment diversification or
concentration, liquidity, leverage, and other factors.

The ratings reflect Standard & Poor's analysis of the subfund's credit quality and

S&P: Islamic Investors' Risk Tolerance Will Determine Demand For Sharia Fund Ratings

Press Release

Islamic Investors' Risk Tolerance Will Determine Demand For Sharia Fund Ratings,
Report Says

LONDON, May 4, 2010--The economic boom in the Gulf Cooperation Council (GCC) region
has fueled the emergence of Islamic finance in the international market in the past
decade. Revenue growth in this region has particularly benefited the asset
management sector, as Standard & Poor's noted in a report published today (see "Using Fund Ratings To Assess Credit And Market Risks In Sharia Funds").

The Middle East is by far the largest market for Sharia-compliant funds, but
conventional players in Europe, South Africa, and the U.S. have also launched a
number of funds that comply with Sharia law during past years, enhancing their
product range to meet the specific requirements of Islamic investors seeking to
invest in this asset class.

The number of product types remains limited, which Standard & Poor's Ratings
Services believes is largely due to the nascent nature of Sharia funds. Funds also
have to be invested in ways that are permitted under Islamic law. Sharia funds,
unlike traditional bond funds, do not invest in conventional rated fixed-income

FAML launches new fund

Faysal Asset Management Limited (FAML) has introduced Faysal Asset Allocation Funds for its customers.

Islamic Wealth Management Report published by Bank Sarasin

Press Release

The report provides investors with an in-depth overview of the various asset classes in Islamic wealth management along with a synopsis of the market scenario during the past 18 months. The report also explores the concept of estate and succession planning, which Sarasin believes is insufficiently addressed in the Islamic finance industry and is a key element of Sarasin’s Islamic wealth management offering. Finally, the report provides an insight into the bank’s economic outlook for 2010.

The key issues and challenges addressed in the report are:

  • how Sharia screening reduced the downside in volatile markets and how it affects the finance industry and investors,
  • the behaviour of direct real estate investments in comparison with real estate funds and Sharia-compliant real estate investment trusts,
  • the income-related role of Sukuk within Islamic balanced portfolios and the probability of defaults,
  • a comparison between various Islamic investment funds ranging from income-oriented to commodity, real estate and equity funds,
  • the size and future of the Islamic private equity and venture capital industry,
Syndicate content