Islamic finance holds lessons for advanced economies, according to Nouriel Roubini

When Nouriel Roubini speaks, you would do well to listen carefully.

The 55-year-old American economist was a voice in the wilderness in the run-up to the global financial crisis of 2008 and 2009, predicting a collapse of property prices, banking disasters and economic recession.

Islamic finance holds lessons for advanced economies, according to Nouriel Roubini

Islamic finance holds lessons for advanced economies, according to Nouriel Roubini

When he was introduced at the Global Islamic Economy Summit in Dubai last week, he was billed as “Doctor Doom” for the gloominess of his forecasts, but also as one of the leading economic thinkers of his generation.

So how does he see the world as it heads into 2014? The good news is that, in global terms, there is an uneven but meaningful recovery under way pretty much everywhere.

The bad news is that asset inflation and “frothiness” could create the conditions for another bust.

“Until now, growth in advanced economies has been below trend, but there are some signs of acceleration. But you have to ask how strong is the recovery in advanced economies? Are there still structural problems there?” he says.

“Recovery has been anaemic in the West, around 2 per cent on average and slower in Japan.

“There is still deleveraging going on. The name of the game is monetary stimulus, but this is causing asset inflation, rather than goods inflation or increased employment. We are beginning to see signs of frothiness in global markets again, while equity prices are high and price [to] earnings ratios [a measurement of equity values] above historical averages,” he adds.

The characteristic Roubini “permabear” mentality is still just below the surface. “Quantitative easing leads to a risk of financial instability, and greed in financial markets can still cause bubbles and crashes,” he warns.

But when he turns to the Middle East economies, and to the growing sector of Islamic finance, his tone brightens noticeably.

“There is a need for a more resilient system, and that’s where there is potential for the Islamic system. It is less volatile and potentially more stable than conventional financial systems. The advanced economies can learn from the Islamic system in this respect,” he says.

Mr Roubini has roots in the region. Born in Istanbul to a family of Iranian émigrés, he got his early education in the region and has come back regularly for speaking engagements and field research.

He believes the Middle East has its own special characteristics, but must still be seen against the backdrop of the emerging market economies of Asia, Africa and South America.

“The prospect for emerging economies is still positive, with 5 per cent growth averages compared with 1 [to] 2 per cent over [the] past few years in the rest of the world. There are demographic dividends with young workforces, and the rise of more affluent middle classes. All this adds up to a long-term trend that is putting these countries at the centre of growth in the global economies,” he says.

The Islamic world has its own opportunities and challenges. “The Organisation of Islamic Cooperation [OIC] consists of 57 states, and they are all very different. In the Gulf, they are mostly oil-rich and the priority is to diversify, and the UAE and some other Arabian Gulf countries have been quite successful in that respect. For oil importers such as Egypt and Syria, it is more difficult, but there are other unstable elements in the region, too: Yemen, Iraq, Iran.

“Islamic countries in South East Asia have been quite successful, like Malaysia and Indonesia, and Turkey also is quite dynamic,” he adds.

The challenge lies in how to exploit what Mr Roubini calls “the democratic dividend”. Having a growing young population is a good thing, but they need education, training and jobs, and in this area some fall short, he believes.

And there is still the challenge of diversification away from oil dependence. While some countries have been partially successful, the extent of the problem lies in one statistic, Mr Roubini says. “This encapsulates the problem: excluding oil and gas revenue, the GDP of the Middle East, with 400 million people, is roughly the same as that of Belgium, with around 10 million people.”

The other good news is that he believes Islamic finance and economy can help span the diversification gap. “The halal economy is a real opportunity, but it needs to be more standardised and integrated into global markets,” he says.

Mr Roubini seems uncharacteristically optimistic with regard to Islamic finance, with some key reservations, and the prospects for Dubai to be a centre for the growing industry.

“I’m all in favour of less risk, and some elements of Islamic finance involve profit-sharing and risk-spreading, which is good. There are many things in Islamic finance that can lead to more stability. There is a lot Islamic finance can teach us,” he says.

“I do not see Islamic finance competing with conventional finance, rather it is complementary to it. The main focus will be on the Islamic world, but others will also seek to get involved, like London.

“One of the challenges of the Islamic financial systems is the issue of insolvency. Creditors have a claim over the underlying assets, which is a good thing, but bankruptcy regimes in Islamic countries are not very strong,” he says.

“Dubai at the moment has good prospects. There has been a recovery in the real estate sector. The lifestyle here is less restrictive than in other countries in the region, and there is safety and security. In the longer term, Dubai can be an important financial centre and a key economy of the region. Sometimes you make mistakes, but if you manage growth more cautiously and manage diversification properly, I’m optimistic about Dubai,” he says.

Can the UAE challenge London and Malaysia, the other major global centres for Islamic finance? “I don’t believe Middle East capital is likely to suddenly fly off to Malaysia, and London is barely starting in the Islamic finance business. It could have a role, but I see no situation where London will supplant Dubai or Kuala Lumpur,” Mr Roubini says.

“The other thought is that perhaps there are too many financial centres in the Gulf. There are at least four, which I believe is too many. In the long term, a couple of them might emerge as the leaders, and I think Dubai and Abu Dhabi could do that.”

[email protected]

http://www.thenational.ae/business/industry-insights/economics/islamic-finance-holds-lessons-for-advanced-economies-according-to-nouriel-roubini#full

Onward to Islamic finance and halal industry 2020

Rushdi Siddiqui (Participation finance/Banking) / 2 December 2013.

Onward to Islamic finance and halal industry 2020

Onward to Islamic finance and halal industry 2020

In one week, Dubai hosted two major Islamic finance conferences — the Global Islamic Economy Summit, or GIES, under the patronage of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai; and the World Islamic Retail Banking Conference, or WIRBC.

At the GIES, Islamic Development Bank president Dr Ahmed Ali Madani was given the Lifetime Achievement Award for his contribution to the development of the Islamic economy. At the WIRBC, former prime minister of Pakistan Shaukat Aziz was given the Global Islamic Finance Leadership Award 2013.

Also in the same week, Dubai was voted as the host city of World Expo 2020 over three other G-20 countries, which were Brazil, Russia and Turkey.

This showcases two extremely important points: one, Dubai, as expected, has recovered from the effects of the global economic crisis and has created a more impactful buzz on the global stage; and, two, Islamic finance and the halal industry are back in the spotlight with a more interesting story with support of its core stakeholders — delegates and sponsors.

Query: Is Dubai an indicator for the pulse of Islamic finance and the halal industry going forward?

Altitude, attitude and aptitude:

At a jet-engine altitude of 35,000 feet, the $1.3 trillion Islamic finance and $2.7 trillion halal industries are the new Brics story — growth stories in growth markets with growth demographics. Thus, there is a story here for financial intermediation linked to the real economy, including halal, deploying savings into “ethical” investments and insuring all aspects of the above.

At a helicopter level of 3,500 feet, it’s about establishing the blueprint on the road ahead with sign posts. It’s not about making Islamic finance bulletproof from market forces, which cannot be done, witness lessons from the bankruptcy of Arcapita, but establishing an enabling infrastructure that allows for the internationalisation of the phenomenon.

At the the grassroots level of three feet, it’s about making it conventionally-efficient on financing (cost of capital/credit and longer tenure and terms), expanding bandwidth of investing asset classes (market performance, but de-coupling from conventional counterpart benchmarks), insuring (achieve size by consolidation and building re-takaful to address premium leakage and customer service (as status quo not acceptable).

It’s also about establishing an environment for innovation, which implies access to risk capital, like crowd funding as part of financial inclusion. It’s about good governance and transparency, as there is confidence crisis after the financial crisis. It’s about establishing human capital development, which is as important as standardisation for Shariah, tax, accounting and regulations.

GIES:

The GIES exceeded venue capacity at Mina Salaam, with 3,000-plus delegates, and only a minor drop in attendance on the second day. There was a buzz and electricity in the atmosphere about Islamic finance and the halal industry that has not been seen, heard or felt in many years.

Emerging markets guru Mark Mobius from Franklin Templeton, clearly articulated that Dubai, a “new” normal, is the best place in the region for ease of doing business and for investments, and on par with many financial capitals.

The 21st-century thinking about the two niche markets is being slowly shaped by Dubai’s ambition of becoming the capital of an Islamic economy. It’s about “beyond” halal food and Islamic finance, as now we are defining, describing and (Muslims) demanding their own products and services.

It’s about (Muslim) consumerism and the hundreds of billions of dollars behind it, from farm, food, finance, fashion, pharmaceuticals, fragrances/cosmetics, travel, hospitality, supply chain logistics/distribution, and so on. The market is there, but the approach is haphazard, hence, the focus on certification and accreditation (for halal) and standardisation (for Islamic finance), i.e., rules of engagement and enforcement, is a good starting point.

Certification and standardisation provides linear progression. For example, it removes uncertainty, which provides efficiencies, resulting in economies of scale, that attracts new entrants with their liquidity that expands the market, providing basis for consensus (if not harmonisation), which then develops the market.

Thus, it can be said the birth of the Accounting and Auditing Organisation for Islamic Financial Institutions, or AAOIFI, in 1991 began the process of removing uncertainties for Islamic financial institutions.

But, the rules are only effective if they are clear, easily available and accessible, and consequences for non-compliance or deviation.

The halal industry has two possible ways forward: one, halal industry stakeholders follow the path and process of establishing their own AAOIFI; or, two, have the AAOIFI expand its mandate/bylaws to the include halal industry and top it up with additional resources. Furthermore, as the IDB is one of its founders, the Lifetime Contribution winner, Dr Madani, should be easy to approach.

Finally, as Dubai does not host any Islamic finance industry bodies, it’s a good opportunity for the winner of World Expo 2020 to have an immediate imprint and impact on the way forward for the halal industry.

Convergence:

Islamic finance got a facelift at the GIES, as many speakers challenged the status quo and injected the halal Industry as an asset class consideration. Today, Muslims (and non-Muslims) are consumer investors in halal company products; they should also be stock investors in the same companies.

A graph, comparing three MSCI indexes — world index, Islamic world index and food production index from 2009 to end of October 2013 — showed that the food index outperformed the Islamic index and us more stable than a conventional index, and it had higher dividend payout, hence, ideal defence sector play.

Furthermore, an opportunity exists to refinance the riba-based balance sheet of many halal companies with sukuk and insure them with Takaful, hence, end-to-end halal offering and convergence with Islamic finance.

Conclusion:

Islamic finance and the halal industry are $4 trillion Brics-type opportunity, and countries embarking on getting a piece of it via Dubai Expo 2020 must start planning, including defining their role of a sunset market participant that becomes a market regulator.

The Expo is a great opportunity for both Islamic finance and sukuk, much like the 2022 Fifa World Cup.

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/opinionanalysis/2013/December/opinionanalysis_December4.xml&section=opinionanalysis

ITS celebrates three time triumph as Best Islamic Finance Technology Winner at World Islamic Retail Banking Conference 2013

Global Islamic Finance Awards recognized ITS’ contribution to Islamic finance through technology excellence.

ITS celebrates three time triumph as Best Islamic Finance Technology Winner at World Islamic Retail Banking Conference 2013

ITS celebrates three time triumph as Best Islamic Finance Technology Winner at World Islamic Retail Banking Conference 2013

Middle East: November 30th 2013 – International Turnkey Systems (ITS) has reinforced its credentials as the leading global provider of Islamic banking solutions after receiving the Best Islamic Finance Technology Award for the third consecutive year at the World Islamic Retail Banking Conference (WIRBC), held at the Shangri La Hotel, Dubai.

The first of their kind in the industry, the Global Islamic Finance Awards were developed to recognize and celebrate the success and contributions of individuals and institutions in the Islamic financial services industry.

ITS Global Financial Solutions (GFS) was honored with the award for its contribution to Islamic banking technology with the launch of its industry leading ETHIX suite of pre-defined finance solutions.

“This prestigious GIFA award is yet another affirmation of our commitment to the promotion of responsible Islamic banking and solidifies our position as an industry leader in providing Shari’a compliant customer centric financial solutions across the world,” said Tarek Khalifa, Area Manager, ITS Global Financial Solutions.

“ETHIX is the jewel in our crown; it has assisted many banks and financial institutions to minimize operational costs in responding to the increased demand of customer for both traditional and Islamic products and services. We will continue to work with our strategic partners and technology vendors to continue driving the future of Islamic Banking forward.”

ITS’ flagship ETHIX technology suite is widely recognized as the most comprehensive, flexible and scalable Islamic banking solution worldwide.

Described as a premier total banking solution catering to tier 1 banks, ETHIX was developed in accordance with Shari’a guidelines. It empowers Islamic banks to improve operational efficiency and reduce cost of ownership in specific areas of Islamic banking, while maximizing opportunities for growth.

About the 5th World Islamic Retail Banking Conference:

The 5th World Islamic Retail Banking Conference is the platform that brings together key policy makers, global Islamic retail bankers and business decision makers to put a spotlight on the challenges, innovations, latest developments and technological solutions essential for the further growth of the global Islamic Retail Banking sector. For more information, please visit: finance.fleminggulf.com/world-islamic-retail-banking-conference/more-info/news-desk.

About ITS- Global Financial Solutions:

ITS Global Financial Solutions (GFS), a part of the ITS Group, is a leader in Shari’a compliant financial solutions, offering financial institutions the business and technology expertise that enables customers to achieve their strategic business goals and achieve operational excellence.

With a track record of over 30 years’ industry knowledge and experience, the company has amassed an impressive customer portfolio and counts many of the leading regional and global Islamic financial institutions as its customers including Kuwait Finance House, Abu Dhabi Islamic Bank, Al Hilal Bank, National Bank of Egypt, Bahrain Islamic Bank, Ahli United Bank, Commercial Bank of Dubai, Faisal Bank, Zenith Bank and Alawwal Capital KSA.

At the core of ITS GFS’s value proposition is its ETHIX technology platform. The company’s ETHIX Shari’a compliant portfolio provides multi-channeled corporate and retail products and services in Islamic finance and investment including core banking, trade finance, branch automation, Sukuk management, online banking, dashboards and reports.

ITS has 1600 staff across the Middle East with a dedicated team focused on the research and development of the ETHIX portfolio.

For more information, please visit: www.its.ws .

© Press Release 2013

© Copyright Zawya. All Rights Reserved.

http://www.zawya.com/story/ITS_celebrates_three_time_triumph_as_Best_Islamic_Finance_Technology_Winner_at_World_Islamic_Retail_Banking_Conference_2013-ZAWYA20131130085543/

Adding new strengths to existing ones

Leverage hub status to make telling impact in global Islamic finance.

The Silk Road historically brought prosperity to cities that had the foresight of ensuring it went through them. Likewise, London was said to have its streets paved with gold, or at least that’s what Dick Whittington believed.

Adding new strengths to existing ones

Adding new strengths to existing ones

Dubai is positioning itself with a major hub for global supply chains — the modern equivalent of the Silk Road — and at the same time setting itself up not just as ‘the capital of Islamic Finance’ but indeed all finance. That is wonderful, but would it be possible to avail the synergies of both efforts?

Indeed, developing supply chain finance (consistent with Islamic finance) and supply chain insurance would ensure Dubai to be uniquely placed in the world to do so.

To say that Dubai is positioning itself to be a major global hub in global supply chains would be an understatement. Dubai has developed not only massive capacity for its port but also for airfreight and for trucks.

A quick look at the map and Dubai’s location between Asia and Europe, its centrality in the Middle East and its proximity to Africa shows such a strategy is indeed a powerful one. When the Icelandic volcano disrupted airfreight over European skies in 2010, Dubai provided an attractive alternative of getting goods from Asia into Europe by land and sea.

As for finance, Dubai is already a regional centre for finance. More than that, it has announced its intent to become ‘capital of Islamic Finance’ and out-compete Kuala Lumpur. Keeping an eye of estimates of the market size being $2 trillion (yes, with a ‘t’ ), David Cameron, the UK Prime Minister, has sought to pre-empt that by announcing UK plans for Islamic Finance as well with the largest issue of a sukuk.

Some natural advantages:

Again, a quick look at the map would confirm that Dubai has some natural advantages over both Kuala Lumpur and London. But in the world of finance, neither London nor Kuala Lumpur have huge first-mover advantage.
So Dubai must leverage its other unique asset – its infrastructure to be a hub for global supply chains – that neither of the other two cities has. And to take advantage of this, it can offer supply chain finance combining and reinforcing both its strengths.

Add supply chain insurance and you have a winner:

Supply chain finance is a way for a buyer to arrange finance for a supplier during the period it is waiting to get paid by the buyer. Because it is tied to assets (goods produced and delivered) rather than to interest per se, supply chain finance certainly merits a closer look by Islamic Finance scholars.
The same applies to supply chain insurance, which is also tied to assets: it insures the loss a company might incur due to a disruption somewhere in its supply chain.

Both supply chain finance and supply chain insurance are relatively small today relative to finance and insurance in general. But this is the time to understand these and develop thought capital and talent.

Last year, Cameron got large UK-based companies and banks together to state his government’s emphasis on supply chain finance following Bank of England’s interest to develop secondary markets.

Likewise, London-based insurers are looking actively into supply chain insurance and some of them already have rudimentary offerings.
Efforts such as these would make cities and nations great only if supported by talent with ties to the city or nation, and this is where UAE efforts on Emiratisation are extremely important. At the basis of developing talent is good education not only on fundamentals but also on opportunities for growth that are important to the region.

Indeed, education on supply chain, on trade, on finance, and on insurance fundamentals can be tied to good jobs anywhere. But combine these with the opportunities that Dubai can create, and sky’s the limit.

The vision for Dubai seems to be already there, so the next step is to continue implementing that vision and to further seek synergies. By combining its strengths in supply chain and in finance, Dubai will be able to truly mix metaphors by paving the Silk Road through it with gold.

— The writer is professor of operations and supply chain management at Cass Business School and the Cass Dubai Centre, City University London .

http://gulfnews.com/business/opinion/adding-new-strengths-to-existing-ones-1.1260883

Islamic finance can speed up global economic recovery – IDB chief

By Samir Ghawi

DUBAI – Islamic Development Bank (IDB) President Ahmed Ali Al Madani urged banking experts this week to come up with more Islamic financial tools and to work diligently to address remaining challenges in liquidity management.

Islamic finance can speed up global economic recovery - IDB chief

Islamic finance can speed up global economic recovery – IDB chief

According to Al Madani, who was speaking at the Global Islamic Economy Summit (GIES) in Dubai, such solutions will provide new opportunities for long-term financing and investment besides opening horizons for Islamic finance to play a greater role in economic development.

“The slowdown in foreign direct investments and the contraction in developmental financing opens a golden opportunity for Islamic financial services to attract the trillions of dollars held by sovereign funds and bags outside the banking system to flow into developmental projects in order to regain stability and advance sustainable economic progress,” he told more than 2,000 participants who included hundreds of bankers and financial specialists.

Al Madani highlighted several world challenges such as the efforts by major states to establish a more secure international financial system, efforts by emerging economies eyeing reforms, and other nations struggling in a transformation phase to regain macro-economic stability and equitable growth.

Advocating trust, credibility, honesty, partnership and justice by shouldering risk-sharing, he cited International Monetary Fund Managing Director Christine Lagarde in her saying that “the values that we aspire to achieve are clearly stated in the foundations of Islamic finance”.

The IDB president also mentioned financial inclusion and prohibition of Gharar (uncertainty), speculation and gambling as other values that the “lost” world has found in Islamic finance but not in the conventional financial services.
He called on decision-makers working on setting up a more secure financial system to realise the ” great role that Islamic finance can play” and to support this industry and professionally enable it to grow and develop.

Noting that many less developed African and Asian countries want to improve the living standards of their citizens, Al Madani urged the strategists behind the GIES initiative to seize the opportunities in the two continents because the whole world would gain by pulling the people there out of poverty.

“Through economic empowerment, zakat and waqf, the Islamic economy can contribute by participating with the people in Africa and Asia in adopting a new path for international economic development and social prosperity,” he said.

The IDB chief called on Islamic countries to improve their business environment and to compete for investments and in currency trading in order to remove regulatory obstacles from the path of financial inclusion.

© Jordan Times 2013

© Copyright Zawya. All Rights Reserved.

http://www.zawya.com/story/Islamic_finance_can_speed_up_global_economic_recovery__IDB_chief-ZAWYA20131128052548/

Malaysia says new Islamic equity standards to lure Gulf investors

By Bernardo Vizcaino

DUBAI, Nov 28 (Reuters) – New Malaysian standards for sharia-compliant equities are expected to attract more Islamic investment funds from the Gulf, a senior official of the country’s Securities Commission said.

Malaysia says new Islamic equity standards to lure Gulf investors

Malaysia says new Islamic equity standards to lure Gulf investors

A revised list of Malaysian equities that qualify for Islamic investment, compiled by the commission, will take effect on Friday. It uses a new screening methodology which incorporates quantitative filters such as benchmarks for financial ratios, moving closer to the approach generally used in the Gulf.

The change will help to internationalise Malaysia’s Islamic finance industry, Zainal Izlan Zainal Abidin, executive director of Islamic Capital Markets at the commission, said by email.

“The attraction of Malaysian Islamic funds and equities to other Gulf states, as a proxy for the growing economic importance of ASEAN (the Association of Southeast Asian Nations), is expected to be accelerated,” he said.
The commission’s methodology had previously included only qualitative screens; for example, it banned companies involved in sectors such as tobacco and alcohol.

Islamic fund managers in Malaysia have six months to dispose of securities that are excluded from the list, which now has a total of 653 sharia-compliant stocks out of 914 listed on the Bursa Malaysia .
The new list will add 16 stocks and remove 158 that were on the previous list, which was issued in May.

Malaysia has the largest base of Islamic mutual funds, with 210 retail and wholesale funds that had 79.6 billion ringgit ($24.6 billion) in assets under management as of December 2012.

These could increasingly be marketed in the Gulf through an existing agreement between the Malaysian Securities Commission and the Dubai Financial Services Authority, Abidin said.

“Given the greater familiarity, Dubai-based financial institutions could be attracted to market and distribute Malaysia-based Islamic funds in Dubai.”

Malaysia may also benefit from a better consumer perception in the Gulf, since its approach to Islamic finance has been criticised as too liberal, said Monem Salam, president of investment firm Saturna Sdn Bhd in Malaysia.

(Editing by Andrew Torchia)

(([email protected])(Telf: +9715 6655 7225)(Reuters Messaging: [email protected]))

Keywords: ISLAMIC FINANCE/MALAYSIA

© Copyright Zawya. All Rights Reserved.

http://www.zawya.com/story/Malaysia_says_new_Islamic_equity_standards_to_lure_Gulf_investors-TR20131128nL5N0JD1PO2/

Islamic Finance Development Indicator launched in Dubai

The ICD-Thomson Reuters Islamic Finance Development Indicator, or IFDI, was officially launched on Tuesday in Dubai. The indicator is a numerical measure representing the overall health and growth of the Islamic finance industry worldwide.

Islamic Finance Development Indicator launched in Dubai

Islamic Finance Development Indicator launched in Dubai

 

The IFDI was officially launched by Khaled Al Aboodi , chief executive officer, Islamic Corporation for the Development of the Private Sector , at the Global Islamic Economy Summit (GIES) to expand the scope of Thomson Reuters’ universe of Islamic finance content, research and news analysis.

“The indicator is designed to assess how well the industry has addressed its religious, economic, legal, ethical and discretionary responsibilities. It provides simplified, quantified, development, knoweledge, corporate and social responsibility, governess and awareness,” Al Aboodi said.

The concluding day of summit also witnessed the findings from IFDI, developed in collaboration with the Islamic Corporation for the Development of the Private Sector , or ICD, the private sector development arm of the Islamic Development Bank , or IDB. As per the analysis, the size of the Islamic finance industry globally was $1.35 trillion in 2012.

This was based on a bottom-up analysis of disclosed financial statements of Islamic institutions. The largest components of the industry were Islamic banking with $985 billion in assets, and sukuk with $251 billion . Russell Haworth , managing director, Middle East & North Africa , Thomson Reuters, said:

“The IFDI’s findings demonstrate the size and breadth of the Islamic finance economy and will serve as a critical reference point for its growth going forward. The ability to accurately size the Islamic finance industry, based on disclosed financial information as opposed to assumptions and conjecture, is key to providing meaningful analysis aimed at developing the industry. ” The findings also highlighted that Malaysia was the largest Islamic finance economy, with total Islamic finance assets of $412 billion and has the largest sukuk market, valued at $171 billion and the second largest Islamic banking market, valued at $194 billion . The Saudi Arabia was second in terms of Islamic finance assets, with assets of $270 billion and the Kingdom also has the largest Islamic banking market, with total Islamic banking assets of $217 billion . Further there are 1,003 financial institutions operating in the Islamic finance space. “Accurate information on the size of Islamic financial industry, its institutions and performance, based on bottom up analysis, is one of the key outputs of IFDI.

Unlike other sources that are focused on specific countries or regions, or utilise sample testing and assumptions to develop their estimates, the IFDI provides accurate information on the entire Islamic finance space and its sub-components,” added Al Aboodi . For more stories on investments and markets, please see HispanicBusiness’ Finance Channel   Source: Khaleej Times (United Arab Emirates) http://www.hispanicbusiness.com/2013/11/27/islamic_finance_development_indicator_launched_in.htm

Emirates Islamic launches four year Wakala Investment option

Offers 2.57% expected profit rate on investment amounts ranging from AED 100,000 to AED 5 million Profits to be paid to customers on an annual basis.

Emirates Islamic launches four year Wakala Investment option

Emirates Islamic launches four year Wakala Investment option

Dubai, November 23, 2013: Emirates Islamic , one of the leading Islamic financial institutions in the UAE, announced the launch of a four year Wakala investment option for customers, with an expected profit rate of 2.57 per cent per annum.

Available on investment amounts ranging from AED100,000 to AED 5 million, Emirates Islamic ‘s latest product closely follows the launch of the 3-year special Ramadan Wakala, that was introduced earlier this year. The four year Wakala investment option differs from conventional Wakala investments, with the profits being paid out on an annual basis to customers.

According to Sharia, a Wakala is a contract between the customer and the bank, where the bank as the Agent has the responsibility to perform a certain task (such as invest in Sharia-compliant goods and/ or financial assets) on behalf of the customer usually for payment of a fee or a commission.

“As a responsible bank focused on community-related initiatives, Emirates Islamic is encouraging its customers to take advantage of such products and develop a culture of saving,” said Faisal Aqil, Deputy CEO – Consumer Wealth Management, Emirates Islamic . “To this end, we are launching a variety of Sharia-compliant savings products, which we are confident will inspire greater saving trends among customers.”

While the amount invested will be for a period of four years, the profits will be paid annually to the customers.

About Emirates Islamic :

Established in 2004, as Emirates Islamic Bank , Emirates Islamic opened its doors with the clear goal of offering discerning customers Islamic finance solutions. Combining the best in Shari’a compliant services with the strongest levels of customer care and efficiency, the bank has established itself as a major player in the highly competitive financial services sector in the UAE. Offering products and services developed in line with the highest ethical standards, Emirates Islamic gives customers the transparency they seek in a strong, honest financial partner.

Emirates Islamic offers a comprehensive range of products and services across the Personal, Business and Corporate banking spectrum. Its network has expanded to reach over 50 branches and more than 100 ATMs across the UAE. In the fast growing area of online and mobile banking, the bank has the reputation as an innovator, and was the first Islamic bank to launch a mobile banking app and the first bank in the Middle East to launch an App on the new Windows 8 mobile platform.

Emirates Islamic has received numerous accolades, both regionally and in the international arena, including recognition for “Best Islamic Bank, UAE” by two extremely prestigious publications, World Finance and CFI. In 2013, the bank was recognised as a “Superbrand 2013,” and as the “Best Corporate Bank” in the UAE in 2013. In addition, it has also been recognised by Sheikh Mohamed Bin Rashid Business Award and Ethos Award for Best Islamic Bank for Customer Service in the UAE. These awards are recognition of the high levels of customer satisfaction as well as an acknowledgement of the bank’s strong record of performance, growth and market leading banking practices.

For further information please visit www.emiratesislamic.ae

For further information, please contact:
Amina Al Zarooni
Media Relations Manager, Emirates Islamic
Tel: 971 4 4397430; Mob: 971 56 6405080
Email: [email protected]

Sudha Chandran | Hiba Moussa
ASDA’A Burson-Marsteller, Dubai, UAE
Tel: 971-4-4507600, Fax: 971-4-4358040
Email: [email protected] | [email protected]

© Press Release 2013.

http://www.zawya.com/story/Emirates_Islamic_launches_four_year_Wakala_Investment_option-ZAWYA20131123060256/

UAE plans new body to oversee Islamic finance push

The UAE plans to develop an independent authority which will supervise the country’s Islamic finance industry, backed by specific legislation, central bank governor Sultan Nasser al-Suweidi has said.

UAE plans new body to oversee Islamic finance push

UAE plans new body to oversee Islamic finance push

A centralised approach to supervising Islamic finance is increasingly being adopted around the globe, as regulators try to standardise industry practices and improve consumer perceptions.

“We will have a sharia authority or a board, that will be outside the central bank,” Suweidi told Reuters on the sidelines of the World Islamic Economic Forum in London.
Legislation which is being developed by the UAE government would enhance the authority’s ability to influence industry practices.

“There is a law that is going to be out…I will not give a time frame but normally those take one year, one year and a half in the UAE,” Suweidi said.

Sharia boards are groups of scholars which rule on whether financial instruments and activities are religiously permissible. Gulf countries have in the past tended to follow a loose, decentralised model of Islamic finance regulation, leaving much of it to sharia boards at individual banks and finance firms.

But the rulings of different sharia boards can be inconsistent or leave scholars open to suggestions of conflicts of interest. So in recent months some countries, including Oman, Pakistan, Morocco and Nigeria, have followed Malaysia’s example by introducing a central sharia board that can impose its will around the country.

Dubai’s decision could help its drive to become a global centre for Islamic business; it wants to develop a set of standards, not just in finance but also in other areas such as halal food processing, which would become accepted internationally.

http://www.arabianbusiness.com/uae-plans-new-body-oversee-islamic-finance-push-524934.html

Dubai seeks global support for Islamic reforms

Dubai is in talks with Islamic endowments in countries as far afield as South Africa and New Zealand to promote its drive for the industry to become more efficient and profit-oriented, a government official said.

Dubai seeks global support for Islamic reforms

Dubai seeks global support for Islamic reforms

Islamic endowments, or awqaf, receive donations from Muslims around the world to operate social projects such as mosques, schools and welfare schemes. They have amassed huge holdings of real estate, commercial enterprises, cash, equities and other assets, which according to a Dubai government estimate total $1 trillion globally.

But the management of these assets remains primitive in many cases; money is often tied up in property or bank deposits that earn miniscule or even zero returns, imposing economic costs on local economies.

Dubai, which is seeking to expand in many areas of Islamic business, wants to become a centre for modernising awqaf and coordinating their activities in order to make them more financially successful.

“There is a lot of waste,” Tayeb Abdel Rahman Al Rayes, secretary-general of Dubai’s Awqaf and Minors Affairs Foundation (AMAF), said of the global awqaf sector. Assets are “not utilised properly”.

Al Rayes said AMAF was in touch with awqaf in the neighbouring emirate of Sharjah and countries including Bahrain, South Africa and New Zealand to discuss how to modernise the industry.

Dubai plans to establish an international body in the emirate during the first half of next year that would handle such cooperation. It would be managed jointly by members and include non-awqaf charities that operated in similar ways, Al Rayes said.

“It’s an authority to look into best practices for all member countries,” he said in an interview at his offices. “We want to create an establishment that will bring all awqaf together but won’t exclude any other organisation. The members will run this entity – we are only there to set it up.”

AMAF hopes to obtain support from the government and private sector to launch the body, in particular to open physical premises, but it would aim to be a self-funded entity, Al Rayes said.

The body would try to coordinate the commercial efforts of awqaf around the globe to give them economies of scale and improve profitability. “One of the roles is to package products under one brand, one logo, so you go out as one,” Al Rayes said.

He gestured to six jars of honey on his desk, produced by the commercial arms of six awqaf from around the world; they were of different shapes and sizes and carried different labelling. Dubai hopes to create a single, unified brand for awqaf globally, which could help their commercial arms sell to Muslim consumers and reduce marketing costs.

Zeinoul Abedien Cajee, co-founder of South Africa’s National Awqaf Foundation, said Dubai’s initiative might have most impact on smaller awqaf and those operating in counries with Muslim minorities.

Awqaf in nations such as Uganda and Malawi as well as South Africa are likely to consider joining the Dubai-based body, he said.

In March, Dubai said it was launching a new asset management firm that would specialise in handling awqaf assets. NoorAwqaf would be owned 60 percent by Noor Investment Group and 40 percent by AMAF; Noor Investment is affiliated to Investment Corp of Dubai, the emirate’s flagship investment vehicle.

With AED10m ($2.7 million) of paid-up capital, the new firm would offer services including due diligence, financial analysis and assisting awqaf to develop their strategic objectives, officials said.

http://www.arabianbusiness.com/dubai-seeks-global-support-for-islamic-reforms-527430.html