Americas

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).

ADEP initiates Brazil's first Shari'ah compliant livestock finance programme for $25 million

Abu Dhabi Equity Partners (ADEP) has successfully initiated Brazil's first Shari’ah-compliant livestock finance programme of $25 million, to fund fattening of 70,000 cattle heads - the metric tonne equivalent of entire U.A.E.'s annual import of beef. ADEP's Brazilian Shari’ah livestock transaction allows a select group of Brazil's "Top 40" cattle feedlot operators to increase their capacity utilization. The financing was structured as a combination of Wakala and Murabaha agreements enabling investors to buy and take title from Rancher, of liquidly traded cattle, insured and stored physically in separate feedlots inspected and supervised by a global monitoring company. Shari’ah-compliant funding of the growing multi-billion US Dollar Halal food industry is a natural yet untapped market segment.

Iran to assemble group for arresting ex-head of Bank Melli Iran

A special group of police officers will be assembled and sent to Canada for searching and arresting the former head of Bank Melli Iran, Mahmoud Reza Khavari. Since Canadian officials haven't found Khavari yet, Iranian police are asking for one week in order to search for him in Canada. The fraud case originally started in 2007 and involved the use of fraudulent documents to obtain credit for an investment company. Khavari, as the head of Bank Melli Iran, was reportedly involved in the fraud case. However, Khavari escaped to Canada. Iran requested Interpol to announce an international search for him. In June of 2012, Fars news agency reported that Interpol placed Khavari on its Red Notice Wanted list.

Cash-rich Islamic banks seek to invest in Western businesses

Cash-rich Islamic lenders are looking to partner with Western businesses that comply with Islamic law, according to a report by The New York Times. The report said there aren't enough acceptable places for Islamic banks to pour their money in, leading American investment bankers to put deals together. Real estate is a popular investment under Shariah since an agreement can be made without requiring interest payments. However, as the banks expand, they are looking to make more diversified investments. One of investments being studied by Islamic banks is that of Continental Rail, a business that focuses on running freight trains up and down the East Coast. If the cars are found to be halal, then it will be one of the first in the US to be completed following Islamic law.

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.

CALL FOR PRESENTATIONS: “CELEBRATING PHILANTHROPY IN EMERGING ECONOMIES”

Global Donors Forum 2014
“CELEBRATING PHILANTHROPY IN EMERGING ECONOMIES”
Gaylord National Resort and Convention Center
April 13-16, 2014

CALL FOR PRESENTATIONS
Deadline: December 10, 2013
Dramatic shifts in the political and economic landscape of many low and middle income countries in recent years have resulted in the emergence of a new class of wealthy individuals. This has led to a rapid growth in private and family foundations in many emerging economies. But the benefits of economic liberalization have not always resulted in an equal distribution of wealth, and income disparities have only been exacerbated by the global economic crisis. This surge in social and economic inequality pleads the need and purpose of philanthropy, both individual and institutional, to be re-examined.

No longer is society looking outside their communities and national borders for change. Whereas once, Aid was the only option, now regional philanthropy is increasingly positioning itself as the “game changer”. This sliding dichotomy from Aid to philanthropy has already begun and nowhere is it more pronounced than in the “Emerging Economies”

Idealratings: Twitter Stock (TWTR) is Shariah Compliant

Due to the enormous requests received during the past few weeks IdealRatings research team conducted Shariah screening on the recent Twitter, Inc. IPO and the stock is to be considered Shariah compliant and eligible for investment as per AAOIFI guidelines.

contact support@idealratings.com for further details

Gassner's picture

Venture Capital the Islamic ideal?

Dear Readers,

Venture Capital has often been regarded as the ideal tool for Islamic finance, particpating in profits and losses of innnovative companies.

Now a major assessment has been done by Cambridge Associates in terms of performance, comparing it to the wider stock market. Result: No outperformance. Considering the lack of liqudity it seems to be much less attractive to professional investors than thought.

See: http://www.cambridgeassociates.com/pdf/Venture%20Capital%20Index.pdf

The lack of success also is induced by lack of transparency and fee models taking away the eventual outperformance. This is for the US market of course. Experiences in less advanced markets could be better or even much worse.

It still has other benefits, as diversifying risk, promoting overall growth and eventuall fostering social benefits.

In order to protect the investor, proper disclosures must be integrated to grow this industry in a healty manner. Further the focus on impact investing will ensure that value is created and risk better managed. What impact investing means could be read here:

See: http://www.thegiin.org/cgi-bin/iowa/home/index.html

American Muslim financial firm launches Islamic estate planning campaign

Azzad Asset Management has announced the launch of a series of estate planning seminars across the United States aimed at helping congregants at mosques and Islamic centers create inheritance plans that comply with both U.S. and Islamic law. It is the 1st Islamically compliant waqf model consistent with U.S. law. The Azzad estate planning seminars began in early September in the Southeastern United States. As part of those sessions, certified financial planners explain the fundamentals of Islamic inheritance law, the importance of wills, and the implications of bequests—in addition to the role each plays in conjunction with a family endowment.

Unleashing Entrepreneurship in the Middle East

16th October 13 - 8:00am to 17th October 2013 - 12:00pm
Hosted by the Fung Inst. & Silatech, this conference is the first chance for top thought leaders from the Middle East, Silicon Valley, the Venture Capital community & the academic community to spur innovation, create jobs & encourage entrepreneurship throughout the middle east.

The conference is being generously supported by a donation from Silatech, a Qatar based foundation focused on expanding economic opportunity and jobs in the Middle East. This leading institution is partnering with UC Berkeley to bring in some of the world's top experts in Middle Eastern Entrepreneurship, Innovation, Islamic Finance, Crowdfunding and Accelerators, to discuss the opportunities in the region to develop a thriving culture of entrepreneurship and innovation. This conference will bring together top experts from the region, scholars and venture capitalists and innovators from Silicon Valley to explore how we can work together to create economic opportunity through entrepreneurship in the Middle East.

For more information, please contact Richard Swart: rswart@berkeley.edu

Nova Resources Swaps European Islamic Investment Bank For Tricor Stake

Nova Resources Limited has agreed to sell its entire stake in European Islamic Investment Bank to Pearce Global Investments Limited, for a total consideration of GBP663,892. The Bermuda-based company said that the consideration is to be paid by the transfer of warrants over 9.0 million shares in Tricor PLC, the AIM-list investment company focussed on the natural resources sector. Nova said that the shares can be exercised at its discretion by the end of 2017, at an exercise prices of 0.5p, although it intends to retain the warrants for the foreseeable future. Nova said the warrants are valued at 7.38p apiece, representing a premium on Tricor's current share price of 6.50p at the time of the agreement.

Iran Ruling In Europe Draws Anger From U.S.

In a setback for the United States’ attempts to isolate Iran, the General Court in Brussels threw out sanctions Friday on seven Iranian companies, including four banks, rejecting arguments that they were acting as front companies to bypass the punitive measures. The United States Treasury took the opposite tack on Friday, imposing restrictions on a network of six individuals and four businesses for links to oil sales. These actions represent a renewed crackdown to curb the use of front companies, financial institutions and businesspeople to conceal the direct involvement of the Iranian government and entities like the National Iranian Oil Company and the Naftiran Intertrade Company. European officials are expected to hold initial discussions on whether to appeal on Tuesday.

New York financial regulator investigates European banks Turkish family dealings

The New York Department of Financial Services (DFS) has asked half a dozen European banks to submit their official records pertaining to their financial dealings with Turkey's Uzan family. The six banks covered by the order are France based BNP Paribas, Societe Generale and Credit Agricole; Commerzbank and Deutsche Bank of Germany and Standard Chartered. The state banking regulator is investigating the case over the illegal business dealings with Uzans. Standard Chartered assured its full co-operation with the regulators, while representatives of the other European banks either declined to comment or did not respond to requests for comment.

Islamic Banks Could Be The Answer To America's Over-reliance On Credit And Risk

Islamic banking is a growing option in America as various Islamic banks pop up across the country to service those who wish to preserve Shari’aa law or those who just want to use an Islamic bank. The key to these Banks is the shared risk. If the financial models show that the borrower is making a bad investment, the bank will tell them that it’s a bad economic decision and it will not invest with them. The underlying message is that the borrower is in a partnership with the bank, so there are no hidden fees. This may be a much better and less risky model to consider that can get you on the property market with just a 5 percent deposit. Islamic bank also offer Islamic bank accounts. Money from demand and checking accounts cannot be used in lending, it’s considered a trust.

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.

Industry body launches manual for Islamic credit unions

The US-based World Council of Credit Unions has launched a manual discussing how to establish and operate sharia-compliant credit unions in developing countries, which could help to broaden the Islamic finance industry's retail customer base. The council hopes the manual will help to develop Islamic credit unions across a wide range of markets. The guide is considered complete but the council also recognises that this is an ongoing project as Islamic finance spreads to other credit union systems. The council used its nine-year experience establishing cooperatives in Afghanistan to create a manual that follows Islamic principles. According to the council, there are now 30 sharia-compliant credit unions in Afghanistan, comprising the world's youngest credit union movement and the only one to claim full compliance with Islamic law.

Islamic Finance Industry Development Challenge

The shift in global banking is not a trend, and the challenge for all of us is to bridge the gap in financial practice and seize the opportunities that lie ahead, bringing ethics back into finance.

Thomson Reuters and Abu Dhabi Islamic Bank (ADIB) are partnering to launch the world’s first Ethical Finance Innovation Challenge and Awards (EFICA). In the dawn of a new economic world, these awards are designed to inspire and recognise a fresh way of thinking by promoting some of the most dynamic, innovative ideas and solutions around integrity and growth.

Harvard Forum: TAKAFUL AND ALTERNATIVE COOPERATIVE FINANCE: Challenges and Opportunities

The Eleventh Harvard University Forum on Islamic Finance titled "Takaful and alternative cooperative finance: Challenges and Opportunities" will take place at the Harvard University, USA on April 26-27, 2014. The forum seeks to reassess and critically engage with issues of risk sharing, mutuality, solidarity, and socio-economic welfare in the context of a discussion about takaful and other types of cooperative financial solutions. Papers are requested in the following areas: MUTUALITY: CHALLENGES AND ISSUES; RISK-SHARING; MARKET PENETRATION: STRATEGIES AND ACTIONS; SOCIO-ECONOMIC BENEFITS. Find detailed information and deadlines in the attached pdf-file.

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