IslamicFinance.de

In its 2012 Islamic Wealth Management Report illustrated by masterpieces of Islamic calligraphy, by the Chinese Muslim master Hajji Noordeen, deals with the theme “The path to corporate transformation – converting a company to Islam”.

Bank Sarasin reviews the complexities of converting a business to Islam, a topic which is rarely discussed or written about. Conversion is complicated by the need to address every aspect of a business, the lack of broadly accepted standards and regulations, and differences in the Muslim world itself. The Report, released today, is the Bank’s third on Islamic Wealth Management.

Converting a business to Islam can increase the value of a company by 18-25% due to the scarcity of genuine Islamic investments. But the conversion process is arduous, extending from the design to distribution and beyond, to how the company spends its profits. As Sarasin notes, the market potential is massive, with the global Muslim population expected to increase by 26% to 2030, to 2.2 billion, rivalling China and India in terms of market size.

According to Islamic Wealth Management (IWM) Report 2012, the Gulf Co-operation Council (GCC) should have a unified rule under one regulator for Islamic investment products for ensuring lower cost of funds.
Bank Sarasin managing director and head of Islamic Finance Fares Mourad and Monzer Kahf, a leading Islamic finance scholar lkaunched the report.
the report presented the fact that reducing expenses and increasing the availability would increase competition, benefiting local investors and further the GCC’s development as a centre of excellence for Islamic finance.

The key challenges and opportunities addressed in the Islamic Wealth Management Report are:

•Managing the Islamic wealth cycle through the entire process of wealth acquisition, preservation and distribution and achieving the required balance between spiritual and worldly obligations.
•Understanding the primary issues facing Waqf donors despite the strong growth drivers in this market: poor performance is due in part to the shortage of professionals leading to low quality asset management and lack of transparency.
•Considering the suitability of the Swiss private banking family office structure as a wealth management tool to ensure effective Islamic governance.
•Addressing the challenges facing Islamic mutual funds to achieve growth and performance.
•Recommending standardisation, education and diversification of Sukuk in order to increase the supply of products and the liquidity of the market.
•Analysing Islamic equity and indices performance over the last year to illustrate that diversification remains key for investment without compromising Islamic principles.