IslamicFinance.de

Dear Reader,

On the occasion of the 10th anniversary of IslamicFinance.de please find at the hyperlink below the relaunch of the newsletter.

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All the best,

Michael Saleh Gassner

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).

IslamicFinance.de has created a fanpage on Facebook - for all the users wishing to follow the news abstracts on the Facebook platform. Please join and enjoy!

The Central Council of Muslims in Germany presented on the BAFIN Islamic Finance conference how mortgages for the Muslim community could look like, how large the market is and challenged the perception that there would be a need to change laws to avoid double real estate transfer tax; it shall rather work tax efficient with proper structuring and without changes. Hence, financial institutions are asked to provide equity and debt based mortgages for the Muslim market.

"South Africa and the Arab northern region has had some limited interest from investors and
economists globally, but everything in between has been seen as a basket-case and lost to the world. Is
there any change in sight? Michael Gassner looks at what is happening on the continent in terms of
Islamic finance."

Full article for free download:

"What is a conventional hedge fund? It lacks a clear definition, but is basically a private investment vehicle for high net worth investors and institutional investors. It is typically privately placed and not subject to the regulation of a public mutual fund. The strategic aim of a hedge fund is to actively manage a portfolio of assets,
mostly listed stocks. Often the goal is an absolute return strategy, to earn profits independent of whether the market goes up or down. "

Read more in the article for free download:

Speech held in 2005 on the triple bottom line investing conference regarding Islamic finance, the impact of interest on sustainability, and whether the real and financial economy is disconnected - closing with the open question "How we do control in the conventional sector price bubbles? Are the Central Banks sufficiently prepared to solve upcoming crisis?".

Islamic Finance survey giving a quick overview about Islamic finance market segments, published in 2007, Swiss magazine "Banco"

The presentation is in German only.

Am 10. April wurde in der Volkshochschule Bielefeld in Zusammenarbeit mit dem Bündnis Islamischer Gemeinden ein Vortrag zur Wirtschaftskrise aus islamischer Sicht gehalten.

Die Präsentation wird hier als PDF Dokument zum Herunterladen angeboten. Die lebhafte Diskussion zu den einzelnen Punkten islamischer Finanzwirtschaft, Wirtschaftstheorie und Empfehlungen zur Wirtschaftskrise enthält sie leider nicht.

I just published an article with the Dow Jones Islamic Market Indexes Newsletter, giving an overview about the lines of arguments regarding performance and ethical screens, be it Islamic or Sustainability and what empiricial findings have been published.

It is claimed by critics that the reduction of the universe through ethical screens shall reduce the performance, likewise corporate social responsiblity comes against a cost. Similar counterarguments have been raised regarding Islamic screening criteria.

Bank Sarasin published a study doing own research with partners and reviewing published empirical analyses in the literature. It shows that there is no negative impact on performance. My review of empirical analyses in regard to Islamic finance concluded the same and all publications let conclude that ethical screens add value by way of risk management. An example is the debt limitation of the Sharia tolerance criteria.

Ethical screens may therefore improve the investment decision process and more research shall determine, which factors add value to the portfolio and therefore form part of a professional process.