Funds

Mashreq Al Islami launches new Sharia Compliant equity fund in MENA region

Mashreq’s Islamic banking division, Mashreq Al Islami, has launched its flagship Islamic Equity Fund, Al Islami Arab Tigers Fund. The fund will facilitate investment in a diversified portfolio of growth and dividend stocks in the MENA region. The Al Islami Arab Tigers Fund will invest in listed equities of companies that comply with Shariah law values. Mashreq fund manager Reda Gomma said that given the spending spree by MENA governments to upgrade their infrastructure, corporate earnings are poised to grow substantially over the medium to long term. Al Islami Arab Tigers is a well regulated fund and is a good opportunity for investors to benefit from growing economies in the Middle East, Gomma added.

IDB approves USD515.6m funds

The Islamic Development Bank (IDB) has approved $515.6 million to fund several socioeconomic development projects. The funds consist of $490 million for the energy sector, divided into $220 million for a power plant project in Pakistan, $90 million for a similar project in Morocco, $83.4 million in Senegal, $60 million for power plant expansion in Mauritania, and $36 million for rural electrification project phase II in Cameroon. The education sector received $17.8 million consisting of $7.5 million for a project in Burkina Faso, and $10.27 million for Suriname. In the transport sector, the Board approved a $6 million technical assistance loan to the Republic of Niger. IDBs Waqf Fund had approved $780,000 as a grant for Muslim communities in non-member countries for educational projects in Bosnia and Herzegovina, Burundi, India and Malawi.

Bahrain’s Al Salam Bank Launches Asian Islamic REIT

Bahrain’s Al Salam Bank has launched a listed sharia-compliant real estate investment trust (REIT) that will invest in a portfolio of Asian properties. The REIT will invest in between 15 and 35 properties and be managed by Swiss-based B&I Capital AG, with Al Salam providing seed capital for the fund. The Islamic lender did not reveal the expected size of the fund. Al Salam was an anchor investor in the Sabana Industrial REIT, which was listed on the Singapore exchange in 2010 and was one of the world’s first REITs to adopt Islamic principles. A handful of Islamic REITs have been launched, including Dubai Islamic Bank’s Emirates REIT in 2010. Malaysia now has three listed Islamic REITs.

US' biggest Islamic fund to launch first plan here

US-based Islamic stock fund manager Saturna Capital Corp is selling its first plan in Malaysia, betting that Southeast Asian equities will weather a global emerging-market rout. The company, which has US$4.1 billion (RM13.6 billion) of assets under management globally, wants to raise RM100 million in the Malaysian fund's first year. The vehicle will invest in syariah-compliant companies in the region, focusing on building-material, healthcare and consumer stocks. The new ringgit-denominated fund will target local and overseas high net worth individuals and institutional investors. The outlook for Islamic fund management in Malaysia is still good, after a constant growth at an average rate of 25 per cent a year since 2009.

Panin Bank Syariah seeks hajj fund worth 1.5 trillion IDR

Panin Bank Syariah, the Islamic banking unit of Bank Panin Indonesia, plans to provide prospective hajj saving service for hajj and umrah. Managing Director of Panin Bank Syariah, Deny Hendrawati, said that company targeted hajj and umrah fund between 1 trillion to 1.5 trillion IDR from four thousand to five thousand customers. Panin Bank Syariah also develops its e-banking service. E-banking service is connected online to the Integrated Hajj Computerized System (Siskohat) at the Ministry of Religious Affairs. Hence, the customer's name who meets the minium saving will be automatically enlisted as a prospective hajj. According to central bank's new rule, Bank Panin Syariah can use its 500 parents' networks across Indonesia.

Alahli SEDCO Residential Development Fund launched

NCB Capital has joined hands with Jeddah-based SEDCO Development Company to launch the AlAhli SEDCO Residential Development Fund, a public close-end Shariah-compliant investment opportunity. The fund provides investors with capital growth by purchasing land plots in Jeddah for development, construction and sale of residential apartments targeting the middle income segment of the population. Minimum subscription is SR50,000 and the fund aims to have an internal rate of return of 10 percent per year. The new fund has been created to address the shortage of reasonably affordable residential accommodation for middle and upper income home buyers.

Gassner's picture

How to achieve a soft landing of a deleveraging, while growing economy?

For many years we see in the media experts believing in inflation and even hyper inflation. However, in the same time we face proponents warning against deflation. So far we all noticed.

Only a about a week ago I read an article by Myret Zaki clarifying that unfortunately inflation and deflation co-exists.

Myret Zaki's thesis is that we face inflation on financial markets, and deflation in the real economy (in French):

http://www.bilan.ch/myret-zaki/redaction-bilan/inflation-et-deflation-co...

In my view there is a general major shift in the price matrix and I still try to figure the magnitude and implications thereof. It is a bit irritating as at University we learned about neutrality of money:

http://en.wikipedia.org/wiki/Neutrality_of_money

This means any extra supply will increase prices equally, 5 % more money, all prices going up 5 %. Pretty plausible at first hand. However, it seems it does not work in reality any more (or never did).

Essel Finance to launch $100-mn Shariah fund

Essel Finance is planning a Shariah fund for foreign investors in real estate. The Shariah fund will have a corpus of $100 million (Rs 620 crore). The fund is looking to close the fund forge partnerships with Shariah funds by February-March. Amit Goenka, chief executive officer, Essel Financial Services said the Shariah partner would offer the fund on its behalf and once the company gets its licence for the offshore fund it was planning, it would bring the Shariah component under its fold. Essel's offshore vehicle may also get its investors to directly invest in real estate projects here and not route it through the fund. The offshore fund has planned a corpus of $200 million. Its domestic fund does debt deals and charges developers with coupon rates of 18 to 19 per cent.

Demand for Islamic pension funds valued at USD190bn

The global demand for Islamic pension funds is currently between $160 billion and $190 billion, according to estimates by Ernst & Young's (E&Y) Global Islamic Banking Center. At present, most of these funds are parked under conventional sovereign pension funds due to lack of investment options. Several fast-growth emerging markets including Malaysia, Saudi Arabia and UAE are seeing strong demand for Shariah-compliant retirement plans. A key decision is whether to allow members of the fund to transfer their existing account balance to the Sharia-compliant fund, or if only the future contributions should be segregated as conventional or Islamic. Additionally, timing for the desired transfer is important. The fund would model the outcomes based on several factors.

Islamic Asset Management sector has potential to grow

The Islamic fund industry manages about $46 billion, only a tiny part of the total global asset management figure, which stands at $60 trillion. The issues that need be addressed for the Islamic asset management and investments to grow were discussed at the first Global Islamic Economy Summit 2013. Performance of the funds is key to bringing in clients, both institutional and retail. In a region, such as the GCC, where the retail component is extremely small, funds have to ensure capturing all the sectors in the market. Moreover, savings ratio in Muslim countries is low and awareness of mutual funds among retail groups is very low. With an attractive performance and support from the sovereign funds and pension funds and the governments, the sector may grow substantially.

EIIB-Rasmala launches Islamic trade finance fund

EIIB-Rasmala, a venture between London-based European Islamic Investment Bank and Dubai's Rasmala Group, has launched a sharia-compliant trade finance fund as a low-risk investment product. The Cayman-domiciled fund is linked to emerging market trade transactions and the firm hopes to attract $100 million into the fund over the coming year. The fund targets a return of 4 percent with low volatility as the firm continues to expand its sharia-compliant product range. Since last year, EIIB-Rasmala has launched three Islamic funds including a leasing fund and a sukuk fund seeded with $25 million of the company's own capital.

GCC Islamic funds enjoyed the highest fund flows post financial crisis

According to Thomson Reuters Global Islamic Asset Management Report 2014, assets under management of GCC Islamic funds have been increasing, post global financial crisis and the 2011 political turmoil in the Arab world. However, assets under management (AUM) have been decreasing for the global Islamic fund industry. While Islamic funds globally have doubled since 2007, the AUM have marginally gone up in the last few years, and have in fact declined 1.7 per cent in 2013. Of the total $62 billion assets under management, Malaysia, Saudi Arabia Luxembourg comprise the top three Islamic fund hubs. The full report will be released next week at the Global Islamic Economy summit in Dubai.

Pent up global demand for Islamic pension funds valued between US$160-US$190 billion, according to EY estimates

According to estimates by EY’s Global Islamic Banking Center, the pent up global demand for Islamic pension funds is currently between $160 bn and $190 bn. At present, most of these funds are parked under conventional sovereign pension funds due to lack of investing options. Since greenfield operations would take too long to satiate market demand, a more practical approach is the partial transformation of existing pension funds to carve out Shari’a compliant tranches. The transformation will need to be carefully planned to choose the right business model and operational framework. The choice of business model will determine the governance structure, the complexity of financial reporting, tax implications, and go-to-market timeframes.

Egypt's Ridge Capital plans Islamic fund of fund in 2013

Cairo-based Ridge Islamic Capital plans to launch the first dedicated Islamic fund of funds in the Middle East by the end of this year, with an initial capital base of $150 million. The Bahrain-domiciled fund will invest across a pool of sharia-compliant funds around the world. Ridge Islamic will contribute $15 million to the fund's capital. The Ridge Islamic fund will be U.S. dollar-denominated and use controls designed to limit risk, including exposure caps by country, sector and asset class. The rules will allow up to 20 percent of the fund's net asset value to be allocated directly into sharia-compliant financial instruments; up to 40 percent of net asset value could go into cash and Islamic money market instruments. The fund has a three-member sharia board with scholars from Egypt, Saudi Arabia and Bahrain.

BIMB will use funds for sukuk security

BIMB Holdings Bhd announced it has notified Bank Negara Malaysia that the security for its proposed sukuk will only comprise the legal assignment over the proceeds from the exercise of its proposed warrants. It includes the legal assignment and charge over a sinking fund account into which all proceeds from the exercise of the warrants will be deposited. The exchange has approved the listing of new shares, warrants and rights in relation to its proposed purchase of the remaining 49% stake in Bank Islam.

Biggest Malaysia Funds Plan to Buy Dollar Sukuk

Malaysia's two biggest state-owned pension funds plan to boost holdings of dollar sukuk.
It is said that their increasing presence in the global arena will help strengthen Malaysia's position as a global Islamic hub and enhance the country's visibility. It will also encourage more local and international issuers to sell dollar sukuk in Kuala Lumpur and around the world.

Islamic portfolios attract ethical investors in US

Ethical investment which has similarities with Islamic based investments has reached US$32 trillion (RM105.6 trillion) in size in the US and the European Unión, according to Nicholas Kaiser, a global investment manager specialising in the issues of ethical and Islamic investment. Though the number of very wealthy Islamic investors in the US were scarce compared to investors in conventional funds, he said his Amana funds are doing very well in the US. The funds attracted American citizens from all backgrounds and Muslim investors are only a small number of the investors in the Amana fund, he added. Nevertheless, it appears that while Amana’s success is the result of the discipline of its Islamic investment nature, investing in Islamic stocks does not necessarily bring profit to the investors.

Court orders HDG Mansur to pay $5.8M in dispute with Islamic funds

A judge has ruled that HDG Mansur Investment Services must return $5.8 million in fees it paid itself from two equity funds it managed under Islamic law. The Indianapolis real estate fund asset manager didn’t have the right to recalculate its fees to claim a higher take for itself, according to federal Judge Colleen McMahon of New York. The lawsuit contends that, starting in early 2012, HDG Mansur began paying itself fees in advance for future real estate transactions. When those deals never happened, the Indianapolis company came up with the underbilling rationale in an effort to cover up the unearned payments that they had been making to themselves. HDG Mansur was dropped as the funds’ manager earlier this year. The judge also ordered HDG Mansur to pay 9 percent interest on the fees that are to be returned.

Sedco to distribute Islamic funds via private banks

Saudi investment firm Sedco Capital plans to register its Islamic funds in Switzerland and distribute them through tie-ups with global private Banks. This is part of efforts to diversify its client base outside Saudi Arabia. Sedco Capital has incorporated environmental, social and governance (ESG) principles into two of the equity funds, widening their appeal to include ethically minded investors in general. The firm hopes this will allow its funds to be marketed to investors beyond traditional Islamic areas in the Middle East and southeast Asia. The firm aims to be able to source two-thirds of its assets under management from outside Saudi Arabia in four to five years. One fund is to be signed by October and the second one by December.Sedco Capital's two ESG funds, launched in May last year, have $230 million in assets and are managed by Stockholm-based Informed Portfolio Management.

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