IslamicFinance.de

Robo-advisers are opening up investment advice to the masses. They can provide sound investment advice for a fraction of the cost of their human counterparts, making it affordable enough for those with as little as US$100 to invest. Junaid Wahedna has taken the robo-investment concept a step further, making it available for those looking for Sharia-compliant investment options. Wahed Invest charges far lower fees than those charged by a conventional wealth manager. The robo-advisor Betterment has accrued over $10 billion worth of assets under management in the US since its launch in 2008. Currently, all of Wahed’s clients are from the US and Mr Wahedna says it plans to start accepting international customers. The company has 50 full-time employees and it has offices in New York, London, Dubai and Mumbai. The company sees a lot of potential in India, having seen strong demand for Islamic investing in the country from its pre-registered clients.

Bahrains's Arcapita has acquired 75% interest in Mentor-based signage and lighting services firm MC Sign. The deal is worth more than $100 million. Atif A. Abdulmalik, Arcapita's CEO, said the company was well positioned to acquire market share in a highly fragmented industry that is dominated by locally-focused, sub-scale service providers. Arcapita's investment in MC Sign reflects the firm's global presence, with offices in Bahrain, Atlanta, London and Singapore. The investment firm has been active in the Middle East too. In October 2017, the firm partnered with Bahrain's sovereign wealth fund Mumtalakat to acquire 90% stake in Abu Dhabi's NAS United Healthcare Services. This was preceded by another deal through which Arcapita acquired logistics assets worth $150 million in Dubai.

President Nicolas Maduro announced that Venezuela would issue 100 million units of an oil-backed cryptocurrency known as the petro. Maduro said that the petro would be backed by 5 billion barrels in the Ayacucho block of the Orinoco Oil Belt. Based on the latest price of the country’s oil basket, the total issue would be worth about $5.9 billion. Maduro believes the cryptocurrency will help the South American country challenge the tyranny of the dollar, economic war and US-led financial persecution. Over the past year, the US Treasury Department has blacklisted numerous top-ranking officials, including Maduro and many of his ministers. Home to the world’s largest crude reserves, Venezuelan oil output fell to a 14-year low last July. Maduro didn’t comment on whether Venezuela bondholders would be paid with petros. At the start, the petro will be obtained through auctions or direct allocation by the country’s Cryptocurrency Superintendent.

Islamic banking has made its entry in Suriname with the approval of the Central Bank of Suriname for Islamic products and services in the banking sector. The official opening of Trustbank Amanah, the first Islamic Bank in Suriname, took place on Thursday 7th of December 2017. Trustbank Amanah aims to develop, support and encourage Small and Medium Enterprises (SMEs) in accordance with Islamic Finance principles. After the official launch of Trustbank Amanah, a Memorandum of Understanding (MoU) was signed with the Ministry of Trade, Industry and Tourism and the Association for Surinamese Business (VSB) to stimulate, support and develop local SMEs.

American University is offering a graduate certificate in Islamic Finance to prepare professionals for both emerging and established markets. The curriculum includes courses that focus on the role of Islamic finance in the global economy and Islamic capital markets. For Ghiyath Nakshbendi, an executive at American University, the graduate certificate is a dream come true. He regularly brings in experts to speak to classes. Speakers who visit and Skype in include CEOs, lawyers and high-profile Islamic finance professionals from Kuwait, Qatar and Bahrain. Nakshbendi does not want finance professionals to be deterred by the "Islamic" in Islamic finance. Students enrolled in the certificate program come from a variety of backgrounds and religious traditions. He believes that the program will help redefine the way professionals do business.

In Toronto the trial begins for Omar Kalair, accused of pocketing millions in 'Shariah-compliant' mortgages. The businessman not only pocketed millions in fraudulent mortgages, he also purchased over $2 million in gold and silver bullion. Kalair was helped by Yusuf Panchbhaya, the chairman of a board of religious advisers who issued fatwas sanctioning the businesses mortgages as Islamic. Kalair and Panchbhaya have both pleaded not guilty to the charges which include theft over $5,000, fraud over $5,000 and laundering the proceeds of crime. While technically interest-free, Kalair charged a fee to his clients at a sum higher than what borrowers would usually pay at market rates. Kalair first disappeared, then turned himself in in March 2014. The precious metals would end up in the hands of Joseph Adam who was designated by Panchbhaya as the Shariah board's manager of finance. Panchbhaya returned the silver to the court, but almost $2 million in gold is still missing. If convicted, the pair could face a maximum sentence of 14 years in prison.

The strategy of 'technology first' and the automation of everything is not how businesses usually start. The traditional barriers have been human and financial capital, as well as various regulatory barriers. Fintech starts with anyone’s business and applies a 'technology first' approach to that model. Islamic finance in the US has taken hold. There are several institutions offering Islamic financial products. They all have websites, a comprehensive online foundation and a robust social media presence. That used to be enough once you have overcome the traditional barriers to entry, but that is no longer the case. Experts predict that in the near future, no enterprise will succeed and flourish without the right fintech services in place. Guidance Residential, a leader in the US Islamic home financing market, was among the first to identify the trend and face that challenge.

#Bahrain-based Ibdar Bank has acquired a prime office building in Boston, USA. The deal is a collaboration with US property manager Lincoln Property Company and asset manager Ritz Banc Group and the total size is $48 million. The Boston property is a single-let building leased to Amazon Robotics, a wholly-owned subsidiary of Amazon Inc. The area is regarded as the "technology corridor", and is home to many well-known technology-related companies making it the epicentre of robotic innovation. The bank’s head of real estate, Bassam Kameshki, said the Boston metropolitan area has witnessed substantial growth within the technology and medical sectors. He ensured that Ibdar Bank will be working to add further value to the property and ensure a profitable exit scenario.

#Canadian Wealthsimple Financial introduced a Shariah-compliant portfolio to expand its product offerings in an increasingly crowded robo-adviser market. According to co-founder Michael Katchen, Wealthsimple’s Halal Investing portfolio is aimed at setting the company apart from its peers. He expects the portfolio’s interest to closely mirror the company’s socially responsible products. Wealthsimple’s fees are a flat 0.5% for the first $100,000 invested and drop to 0.4% on any additional investment. Privately held Wealthsimple has raised 100 million Canadian dollars ($79.6 million) over several funding rounds over the past three years led by a subsidiary of the Power Corporation of Canada. Katchen said he expects to tap another round of venture funding before seeking an initial public offering.

As the world of business is global, business schools are getting similarly global in their outlook. The need for a more diverse approach in business schools crosses all levels, from the makeup of faculty and the curriculum to the students themselves. Walid Hejazi, associate professor at University of Toronto’s Rotman School of Management stresses that diversity from a business school perspective is not so much a moral or equity imperative as it is about long-term sustainability. In his view, businesses that are diverse in their workforce are not only more innovative, they also work more effectively. Other business schools are following suit emphasising diversity on all levels. For example, the Beedie School of Business at Simon Fraser University introduced an Aboriginal Business and Leadership EMBA program to advance aboriginal leaders’ business education.

Dear Reader,

regular readers may remember my critic on bitcoin from an Islamic perspective missing intrinsic value. The former blog entry you find here: http://www.islamicfinance.de/?q=node/7840 - almost two years ago.

So far bitcoin just went up higher and higher, with wild fluctuations but nevertheless.

It reminds on how bubbles work, think about the tulip mania in 1637 a nice piece of economic history. A single tulip bulb was traded and bought on credit. Check the Wiki page on it:

https://en.wikipedia.org/wiki/Tulip_mania

As bitcoin has even less value than a tulip except for payment purposes, it is the payment functionality, which can lead to destruction. What happens if a new alternative currency is becoming en vogue, which has a better usability and faster transaction time? In my view this is most likely trigger to burst the bubble.

FT Alphaville covers now the difficulties coming up with bitcoin's increasing transaction numbers causing inconvenience in using the digital currency:

https://ftalphaville.ft.com/2017/05/17/2188961/the-currency-of-the-futur...

Bashar Qasem is the most outspoken voice among Muslim investors in the United States. He was the only Islamic financial representative among religious shareholder advocates who sent a letter in February to protest U.S. President Donald Trump’s travel ban. Qasem's Azzad Asset Management firm started its work in 2005, weighing in on issues like worker safety, climate change and lobbying disclosures. This direct advocacy will test whether U.S. Muslim investors will support the sort of faith-based shareholder activism common among other religious groups. Qasem's strategy appears to be helping to differentiate his firm from other asset management firms. Azzad's assets increased 11% in 2016 to US$487 million (£393 million) at year-end. Growth included US$5.7 million into the firm’s mutual funds, the third consecutive year of inflows.

Trustbank from Suriname is one step closer to open its doors to customers interested in Islamic banking products after it signed a new licensing deal with the Kuwaiti based software vendor, Path Solutions, to implement Islamic Banking and Investment System as a new core banking platform.
This is major thing for the Path Solutions, as it’s the company’s first Islamic core banking software deal in the Americas. The company won the deal as one of three shortlisted vendors besides Oracle FS, Temenos. Path Solutions won the deal because of ist Sharia compliance, product functionality and technological superiority.

Samantha Lord-Konare converted to Islam six years ago and then she found herself in a quandary because of a student and credit card loan that her new religion prohibited. Lord-Konare vowed not to use her credit card but resolving the issue of her student loan was more challenging.
She consulted the imam who presented her with four options. She could pay off her loan in one lump sum, obtain an interest-free loan, receive the money as a gift, or do her best to pay off her student loan as quickly as she could. "Of course, I had to choose the last. I could never ask someone for that amount of money," said Lord-Konare.
Islamic scholars say there is a clear prohibition on usury in the Koran. The Shariah also stipulates that Muslims should acquire wealth in a legal and ethical manner; any element of usury, gambling or chancing is forbidden.

GCC is expected to account for about 31% of sovereign bond issuances from emerging markets this year. The expected 2017 sovereign issues will be distributed among GCC, Eastern Europe Middle East Africa and Latin America, according to forecasts by Bank of America Merrill Lynch.
Issues from the GCC has been increasing rapidly mainly due to low oil prices, with some new issuers in 2016, and analysts expect the 2017 issuance to continue to be high. Among those, Kuwait inaugurated the external sovereign debt market with $8 billion (Dh29.3 billion) to finance a budget deficit resulting from low oil prices. Sovereign issuance for 2017 is forecast to be 6% higher compared to the previous year. In 2016, sovereigns issued $135 billion, mainly from Latin America, while corporates issued about $300 billion, mainly from Asia. Analysts expect gross sovereign external issuance to come in at $144bn in 2017.

Islamic finance is increasingly making inroads into the US in a variety of forms, but widely out of the radar of the broader public. In the recent past, there has been a rise in the number of Islamic financial service providers. There are now about three dozen official Islamic finance providers in the US. Among the top institutions offering Islamic financial services in the country in terms of asset size are Lariba American Finance House and the associated Bank of Whittier in Los Angeles, as well as University Islamic Financial in Michigan. In terms of skills training, Harvard University has an Harvard Islamic Finance Program and the Franco-American Alliance for Islamic Finance is organising Islamic finance seminars this summer. On the consumer side, Islamic finance in the US is mostly prevalent in the real estate market.

US-based State Street Global Advisors announced that a huge exchange-traded fund for investment in gold has been certified as being sharia compliant. The question of whether ETFs themselves comply with Islamic law has not been addressed. The fund, called SPDR Gold Shares, is one of the world's largest ETFs, having a net asset balance of more than $30 billion. Managed and marketed by State Street Global, it is listed on the New York Stock Exchange. The World Gold Council paved the way for certification by asking the Accounting and Auditing Organization for Islamic Financial Institutions to determine criteria for gold trading. The AAOIFI announced standards for gold trading in December 2016. Joseph Cavatoni, who is in charge of ETFs at the World Gold Council, said the certification is an important step toward meeting demand for gold in the Islamic financial market.

Azzad Asset Management has joined other socially responsible investment institutions in signing a coalition letter to the 19 CEOs who are members of President Trump's Strategic and Policy Forum. The letter asks to oppose the president's recent executive order barring refugees and certain immigrants from seven majority-Muslim countries. In addition to public outcry against the ban on humanitarian and constitutional grounds, many have pointed out the negative impact of barring international workers on the economy. The letter was signed by 64 socially responsible investment firms and human rights and religious organizations. The Strategic and Policy Forum's first meeting is scheduled for February 3.

Charles Haresnape, Aldermore’s group managing director of mortgages, is leaving the real estate company after six years. Haresnape will be joining shariah-compliant Gatehouse Bank as chief executive. An Aldermore spokeswoman confirmed that Haresnape was leaving and said he had been instrumental to the growth of the company's mortgage business. She added that Charles Haresnape would remain in the business whilst Aldermore searched for his replacement.

US President Donald Trump has been accused of courting international trade friction and a new international debt crisis. There were already signs given the huge debt built up over a decade of record low interest rates, and that rates had begun rising. The next international debt crisis could well be in the emerging market corporate sector. Global debt has reached US$217 trillion, equal to a record 325% of global gross domestic product. Investors in Brazil, South Korea, Thailand, Chile, Czech and Malaysia especially have been big borrowers. While most of this has been in local currencies, corporates in India, Saudi Arabia, Turkey and Russia as well as Hong Kong and Singapore have borrowed heavily in foreign currency. This creates a currency mismatch situation.