Mumbai to have school to teach Islamic investments

Malegaon: In order to educate Muslims about investments in various financial sectors, including stock exchange, capital market and banking in accordance to the principals of Sharia ( Islamic law), the Indian business capital Mumbai will soon have an academy.

“Our experts and faculty will educate youth on the Sharia-compliant companies where investment can be done. We are in the process of finalizing the feasibility of such a project,” an Indian English daily quoted Imtiaz Merchant, managing director of Pragmatic Wealth Management as saying.

“The need for trained professionals on Islamic finance is dire because globally, it is becoming an acceptable mode of investment. And there are enough opportunities for individuals trained in Islamic finance and banking,” Times of India quoted Dr M Y Khan.

Dr. Khan, the chairman, Pragmatic Wealth Management, is a visiting professor to several reputed organizations, including International Monetary Fund (IMF).

Pragmatic Wealth Management Pvt. Ltd, a Mumbai Central-based firm which gives guidance on how to manage wealth according to Islamic laws is coming up with an academy where educated youth will be encouraged to seek employment and do business in the financial sector where participation of Muslims at present is shockingly low.

source :Ummid

Sharia products for insurer Union

The Union Insurance Company expects revenue to increase by 32 per cent this year through the introduction of Sharia-compliant products.

The company, based in Ajman and listed on the Abu Dhabi Securities Exchange (ADX), said it would introduce Islamic insurance products, known as takaful, this year.

“This company will become an Islamic insurance company, therefore we expect a lot of business from the market,” said Dharmasiri Edirisinghe, the finance manager at Union Insurance.

Mr Edirisinghe confirmed a statement posted on the ADX website, which forecast a 32 per cent rise in revenue this year.

“We have an expansion programme … We are hunting for new business, therefore we expect 32 per cent growth,” Mr Edirisinghe said.

He said an announcement concerning the new Sharia-compliant products would be made “in the near future”, adding that the launch would be accompanied by a marketing drive.

According to the statement to the ADX, the board of Union Insurance had agreed on a 7 per cent increase in administration costs for this year.

This increase is due in part to the company’s plan to convert to a Sharia-compliant insurance system. For this purpose, the board has shortlisted candidates for a planned Sharia committee, the statement said.

An update of the company’s IT infrastructure will also contribute to the increase in administration costs. The board approved a plan to upgrade its PREMIA insurance software by the IT firm 3i Infotech, at a cost of Dh581,440 (US$158,296), according to the statement.

The company’s board has approved the creation of two units to invest in commercial and property projects, the statement said. It said the board also assigned a committee to draw up a plan to invest no less than 30 per cent of the investment portfolio in bonds issued in Abu Dhabi.

source : the national

Quarterly review of Dow Jones Islamic Market Indexes

The top five components by free-float market capitalisation that will be added to the index are Teck Resources (Canada, Basic Resources), Sandvik AB (Sweden, Industrial Goods & Services), China Shenhua Energy (China, Basic Resources), Clorox (US, Personal & Household Goods) and Assa Abloy (Sweden, Construction & Materials). The total free-float market capitalisation of the reconstituted Dow Jones Islamic Market World Index increased to $14.31 trillion from $14.11 trillion.

In the Dow Jones Islamic Market Asia/Pacific Index, with 62 additions and 26 deletions, the number of components in the index will increase to 1,199 from 1,163. The top five components by free-float market capitalisation that will be added to the index are China Shenhua Energy, Coal India (India, Basic Resources), S-Oil Corp (South Korea, Oil & Gas), Zhaojin Mining Industry (China, Basic Resources) and Mando Corp. (South Korea, Automobiles & Parts). The total free-float market capitalisation of the reconstituted Dow Jones Islamic Market Asia/Pacific Index increased to $2.66 trillion from $2.60 trillion.

In the Dow Jones Islamic Market Europe Index, 12 components will be added, while five components will be deleted. That increases the number of components in the index to 388 from 381. The top five components by free-float market capitalisation that will be added to the index are Sandvik, Assa Abloy, Pandora A/S (Denmark, Personal & Household Goods), Fiskars Oyj (Finland, Personal & Household Goods) and ASOS PLC (United Kingdom, Retail). The total free-float market capitalisation of the reconstituted Dow Jones Islamic Market Europe Index increased to $3.11 trillion from $3.06 trillion.

In the Dow Jones Islamic Market Americas Index, the number of components will increase to 798 from 776, with 37 additions and 15 deletions. The top five components by free-float market capitalisation that will be added to the index are Teck Resources, Clorox, Motorola Mobility Holdings (US, Technology), MEG Energy Corp. (Canada, Oil & Gas) and New Gold (Canada, Basic Resources). The total free-float market capitalisation of the reconstituted Dow Jones Islamic Market Americas Index increased to $8.33 trillion from $8.24 trillion.

In the Dow Jones Islamic Market MENA Index, no components will be added, while three components will be deleted. That decreases the number of components in the index to 160 from 163. The total free-float market capitalisation of the Dow Jones Islamic Market MENA Index decreased to $103.05 billion from $106.94 billion.

In the Dow Jones Islamic Market BRIC Equal Weighted Index, four components will be added, while five components will be deleted. That decreases the number of components in the index to 84 from 85. The total free-float market capitalisation of the reconstituted Dow Jones Islamic Market BRIC Equal Weighted Index increased to $795.40 billion from $767.98 billion.

In the Dow Jones Islamic Market China Offshore Index, two components will be added and two components will be deleted. The number of components in the index will remain at 23. The free-float market capitalisation of the reconstituted Dow Jones Islamic Market China Offshore Index increased to $110.60 billion from $95.01 billion.

In the Dow Jones Islamic Market Hong Kong Index, with 11 additions and one deletion, the number of components will increase to 144 from 134. The free-float market capitalisation of the reconstituted Dow Jones Islamic Market Hong Kong Index increased to $176.92 billion from $164.86 billion.

In the Dow Jones Islamic Market India Index, seven components will be added and nine components will be deleted. That decreases the number of components in the index to 175 from 177. The top five components by free-float market capitalisation that will be added to the index are Coal India, Prraneta Industries (India, Industrial Goods & Services), Orissa Minerals Development (India, Basic Resources), MOIL (India, Basic Resources) and Persistent Systems (India, Technology). The free-float market capitalisation of the reconstituted Dow Jones Islamic Market India Index decreased to $274.03 billion from $286.91 billion.

In the Dow Jones Islamic Market Turkey Index, one component will be added and no components will be deleted. The number of components in the index increases to 33 from 32. The free-float market capitalisation of the reconstituted Dow Jones Islamic Market Turkey Index decreased to $16.16 billion from $16.19 billion.

In the Dow Jones Islamic Market Titans 100 Index and sub-index, Dow Jones Islamic Market US Titans 50 Index, UnitedHealth Group Inc. (US, Health Care) will be replaced by Halliburton (US, Oil & Gas). The change is a result of the regular quarterly review of the Dow Jones Islamic Market World Index. The Dow Jones Islamic Market Titans 100 and its three sub-indexes, Dow Jones Islamic Market U.S. Titans 50, Dow Jones Islamic Market Asia/Pacific Titans 25 and Dow Jones Islamic Market Europe Titans 25 are reviewed annually in June. The free-float market capitalisation of the reconstituted Dow Jones Islamic Market Titans 100 Index increased to $6.763 trillion from $6.762 trillion.

An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies. To determine their eligibility for the Dow Jones Islamic Market Indexes, stocks are screened based on their industry type and their financial ratios. Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defence/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33 per cent or more: debt divided by trailing 24-month average market capitalisation; cash plus interest-bearing securities divided by trailing 24-month average market capitalisation; and accounts receivables divided by trailing 24-month average market capitalisation.

There are currently more than 125 licensees with more than US$5 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.

source : CPI financial

Harmonisation and Regulatory Consolidation of Islamic Finance

Recent efforts aimed at regulatory consolidations and setting standards have given due recognition to the economic constraints and legal uncertainties arising from the imposition of Islamic jurisprudence.

They have also addressed the relative lack of uniformity in market practices. In view of these developments, it is possible that market inefficiencies arising from different interpretations of Shariah compliance will diminish in the near future.

The leading regulatory bodies in Islamic finance such as the Accounting and Auditing Organization of Islamic Finance Institutions (AAOIFI), the General Council for Islamic Banking and Finance Institutions (GCIBFI), the Islamic International Rating Agency (IIRA), the Islamic Financial Services Board (IFSB) and the Figh Academy in Jeddah have all been working towards aligning Shariah principles towards a consistent basis.

A fine balance needs to be drawn between regulatory revisions and collective initiatives to ensure that standardisation does not stifle financial innovation. Responding to efforts by professional organisations seeking greater uniformity, an IFSB task force is due to publish recommendations for standard sukuk structures later this year.

source : islam online

Sri Lanka lawyers, accountants promote Islamic finance

Sri Lanka lawyers, accountants promote Islamic finance
Mar 19, 2011 (LBO) – Top organizations representing Sri Lanka’s lawyers and accountants have brought together experts in Islamic finance to broaden understanding of one of the faster growing niches in the financial sector.
The Chartered Institute of Management Accountants (CIMA) Sri Lanka Division and the Bar Association of Sri Lanka (BASL) said they are hosting program on Islamic Finance and Banking on March 28.
“Islamic finance has become one of the world’s fastest growing financial sectors as investors show an increasing appetite for a variety of Islamic financial instruments,” organizers said in a statement.

“The growth in Islamic finance in recent years has been driven by renewed awareness of faith based concepts and the internationalisation of the financial markets.”

Islamic finance is compliant with Shariah or Islamic law which prohibits charging of interest, speculating with derivatives or options or investing in firms that produce pork or pornography.

The program will introduce the concept deal with equity investments, accounting for Islamic finance, corporate governance, the regulatory framework, legal and tax issues.
Among the speakers would be, M A M Shukri, director, Naleemiah Institute of Islamic Studies; Faizal Salieh, managing director, Amana Investments Limiteda and Ishrat Rauff, managing director, Adl Capital Limited.

Also in the program are Reyaz Mihular, Partner, KPMG Ford RhodesThornton & Co.; Suresh R I Perera, principal -tax and regulatory, KPMG Ford Rhodes Thornton & Co; Yvette Fernando, director bank supervision, Central Bank and Javed Mansoor, Attorney-at-Law.

source : lbo sri lanka