Wealth Management

SCOTTISH Widows Investment Partnership enters Saudi market

The Scotsman reported on 29 January that SCOTTISH Widows Investment Partnership has launched a joint venture with Manar Financial Investment Company; Swip Saudi Asset Management. It will mainly focus on investment in the insurance sector, but will also manage shariah-compliant global emerging market equities.

Bank of London and the Middle East launches Private Banking

TradeArabia reported on 27 January that the Bank of London and the Middle East (BLME), will be extending its wealth management division with the launch of a private banking business. The new project will be headed by the newly appointed head of private banking Adrian Gayler, who joins BLME from Merrill Lynch International Bank Limited. Gayler will be based in BLME’s new private banking offices in Mayfair, London, along with the already established specialist wealth management team

Dow Jones Islamic Market Index Monthly Performance Report

Press Release - full text attached:

New York (January 27, 2009) — Based on the close of trading on January 26, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -5.55% month-to-date, closing at 1646.71. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -9.00%, closing at 131.03.

- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased -9.90%, closing at 1252.00. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of -11.40%, closing at 90.89.

- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1596.39, a loss of -7.60%, while the pan-European blue chip Dow Jones STOXX 50 Index lost -10.97%, closing at 1926.07.

Saudi-Arabia Falcom Shariah Index launched

Mushtak Parker reported in Arab News on 26 January about the launch of Falcom Sharia Index licensed by Tadawul (the Saudi stock exchange). The promoters claim that this index is the first of its kind on the Tadawul, and comprises some 112 companies which in turn comprise nearly 78 percent of the Tadawul All-Share Index (TASI).

New Islamic ETF

US based Javelin Investment Management LLC plans to launch the JETS Dow Jones Islamic Market International Index Fund according to the Wall Street Journal on 8 January. Further details were not provided.

Dubai launches Islamic commodity hedge fund index

Reuters reported on 7 January that the Dubai Multi Commodities Centre Authority (DMCC) and Shariah Capital launched an index tracking the performance of Islamic hedge funds investing in commodities.The index performance will be calculated and reported by Thomson Reuters (TRI.TO). The index is based on four hedge funds, part of the DSAM Kauthar Commodity Fund and investing in gold, energy, natural resources and mining. Each fund has received start capital of $50 million from the DMCC.

Crisis offsets Islamic wealth management 2008 gain

Guardian reported based on Reuters on 7 January that market volatility wiped out all of the asset gains made by the Islamic fund management industry in the year to September 2008, citing US-based research and data provider Cerulli Associates. Sharia-compliant fund managers had assets of USD 65 bn at the end of the 3rd quarter 2008, including assets managed via discretionary mandates for institutions and high net-worth individuals and mutual funds. Assets invested in Islamic-compliant mutual funds rose by 50 % while the number of such funds doubled in the three years to 2008. Islamic mutual funds alone accounted for USD 35 bn-- up from USD 23.2 bn gathered in 2005. Sukuk funds remained a rare offering. Once markets stabilise this industry can potentially expand at a rate of above 10 % a year, the report said. Saudi Arabia is currently the largest domestic market for shariah investments. Challenges named in a poll by Cerulli were named the Sharia compliance costs, convincing investors of the Sharia compliance, the discrepancy in Sharia standards and the lack of 3rd party distribution.

Report order form: http://www.cerulli.com/pdfs/2008_Shariah_Info_Packet.pdf

Shariah compliant green fund launched

Hedge Fund Review reported on 22 December about the Falcon Fund launched by Da Vinci Invest of Zurich, aiming to invest in the carbon markets and forestry.

The fund will actively trade the carbon markets on a short-term basis and invest in forestry for the long term. Da Vinci Invest expects this strategy provide consistent value growth, diversification and an environmental benefit. Rainforest Invest, Forest Finance and Miller Forest will source opportunities in Panama, Costa Rica and Paraguay.

Only land formerly used for agricultural will be planted. No rainforest will be cut to farm the plantations. The Da Vinci Green Falcon Fund will charge a 2% management fee and a 20% incentive fee.

Da Vinci Invest, incorporated in 2004 as a UK company, is based in Zug.

Polaris Investment Trust Plans to Issue Taiwan Islam ETF

Philip Liu CENS.com reported on 2 April that it plans to roll out Islam ETF in the second quarter this year.

The firm is also in talks with Morgan Stanley Capital International (MSCI) for licensing of its Taiwan Islam Index for use in issuing the Islam ETF in Abu Dhabi. The MSCI Taiwan Islam Index consists of 60 constituent stocks, selected from the over 120 constituent stocks of MSCI Taiwan Stock Index, whose operations conforms to the tenets of Islam.

Liu Tsung-sheng is president of Polaris Investment Trust.

Source: http://news.cens.com/cens/html/en/news/news_inner_22868.html

Dow Jones Indexes opens Dubai Office

Talal Malik reported on 14 April in Arabian Business that Dow Jones Indexes opens its first Middle East office in Dubai.

Michael A. Petronella is president of Dow Jones.
Sumeet Nihalani is Dow Jones' senior director of sales for the region.
Imran Vohra is Head of Dubai office.
Rushdi Siddiqui is global director of Dow Jones Islamic Market Indexes.

Source: http://www.arabianbusiness.com/516453-dow-jones-indexes-opens-first-midd...

"First Persia Fund" to invest in Iranian Stock Exchange

Business Intelligence reported on 14 April that the "First Persia Equity Fund", opened its second-phase of subscription and it aims to raise Euro 250 m, the fund was established in July 2007 with Euro 34 mn.

Shares listed on the Teheran Stock Exchange, TEPIX, which advanced 3.9% so far this year, trade at an average of 4 or 5 times earnings. That compares to a multiple of 15 for the MSCI GCC Countries Index, a measure of more than 140 companies in six GCC states.

Stephen Austen is the fund's Managing Director. The fund is said to have outperformed the benchmark so far.

Source: http://www.bi-me.com/main.php?c=3&cg=2&t=1&id=19192

Turkey: Shamil Bank's Real Estate Fund

Shami Bank released on 13 April the successful closure of its USD 90 mn Shamil Bosphorus Modaraba, an investment vehicle with an expected 60 % over three years focussing on residential and mixed-use real estate developments in Istanbul, and secondary homes on the Turkish coast.

The total cost of the projects targeted is approximately USD 450 mn. Shamil Bank subscribed to 10 % of the USD 90 mn.

Abdul Hakim Al Mutawa is Investment and Private Banking Head of Shamil Bank.

http://www.arabianbusiness.com/index.php?option=com_pressreleases&view=d...

Sharia compliant Gold Exchange Traded Fund

Peter Cooper reported on 9 April on Business 24/7 about the Sharia compliant Exchange Traded Fund (ETF) by Dubai Multi Commodities Centre (DMCC) and World Gold Council. The ETF will be backed by physical Gold deposited under the Almas Tower of DMCC. After approval of the regulatory body Dubai Financial Services Authority (DFSA) a secondary market will be operated by listing the ETF on the Dubai International Financial Exchange (DIFX).

DMCC has taken a share in London-listed Shariah Capital, which is supervising the compliance. Other Gold ETFs usually used derivatives to replicate the performance of Gold.

Source: http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=...

Swiss banks going onshore in the Middle East

Andrew White reported in Arabian Business on 11 April about Swiss banks going onshore in the Middle East.

Pasha Bakhtiar, managing director at Lombard Odier Darier Hentsch (LODH) focusses over the next 10 to 20 years to grow the presence in areas with strong wealth creation, which is the case in the Middle East. Last year the bank established a formal presence in Dubai to better offer its services to existing and new clients in the GCC. Lombard sees an advantage in being a family owned bank like the family businesses in the region.

Hans Nützi, CEO at Clariden Leu agrees that Private Banking becomes more international opposed the way clients banked 5 to 10 years ago. Clariden Leu has a local 13 people asset management team in Dubai and sees demand for structured products.

http://www.arabianbusiness.com/516200-banking-on-the-old-school

New Islamic Private Bank in Switzerland planned

Andrew England and David Oakley wrote a short briefing on 30 March in the Financial Times about a new Islamic private bank planned in Switzerland. National Bank of Kuwait is supposedly partnering with a Saudi-Arabian institution.

Source: http://www.ft.com/cms/s/9bbfce9e-fe8c-11dc-9e04-000077b07658,Authorised=...

Gulf wealth projection USD 3.800 bn by 2012 - consulting firm Oliver Wyman

In a press release the consulting firm Oliver Wyman gave insights into their report "The Future of Private Banking - A Wealth of Opportunity".

Wealth held by high net worth individuals in the GCC - those with investable wealth of more than $1 million - is expected to grow from USD 2100 bn in 2007 to USD 3.800 bn by 2012. Annual growth is expected to slow down from previously 11 % to 9 % over the next 5 years.

Globally an estimated 16% of HNWI wealth was held offshore in 2007 while for the Middle East an estimate 52% is given in the press release. However, this is countered by a strong trend amongst the GCC's richest to repatriate wealth and invest in regional assets.

The scarcity of talent - skilled and experienced client relationship managers - is also a challenge in the Middle East, with dedicated on-the-ground coverage teams needed for billionaire families and top UHNWIs.

About Oliver Wyman www.oliverwyman.com

Full Press Release: http://www.arabianbusiness.com/index.php?option=com_pressreleases&view=d...

Responsible Investing Guidelines Include Shari'ah Law and Prohibited Nations

Northern Trust announced that it has enhanced its investment compliance monitoring capabilities for institutional asset servicing and wealth management clients globally, by expanding the range of environmental, social and governance (ESG) factors monitored by Northern Trust Compliance Analyst® to help clients meet responsible investing goals.

Compliance Analyst is a customizable, Web-based tool that alerts investors when portfolios are nearing or have breached established limits in a client's investment policy. In addition to corporate governance rankings and the 10 socially responsible investment restrictions currently available on Compliance Analyst, Northern Trust has extended its agreement with RiskMetrics Group to offer additional screening capabilities that cover the following issues:

Prohibited Nations according to US legislation or government, Shari'ah Law, Landmines and Cluster Bombs, Animal Testing/Welfare

For more information, visit http://www.northerntrust.com.

Source: Northern Trust, http://biz.yahoo.com/prnews/080318/aqtu043.html?.v=54

Dubai Financial Market Sharia Board issues first Islamic standards for classifying listed companies

Business Intelligence reported on 18 March that the Sharia Board of the Dubai Financial Market (DFM) has issued the first standards for trading shares. The establishment of such standards is in line with DFM becoming an Islamic exchange as decided on the Annual General Meeting in 2007. Since then the Sharia Board with its Chairman, Dr Hussain Hamid has focused on the establishment of criteria to classify listed companies in terms of Sharia-compliance and accounting practices.

The standards are divided into five sections and cover the following areas: definitions of terms and criteria; implications for brokers and investors; guidelines for compliance for conventional firms; conventional income guidelines; and general rules and regulations.

Mr Essa Kazim is Chairman of the DFM.

Source: http://www.bi-me.com/main.php?c=3&cg=2&t=1&id=18389

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