Thursday, June 07, 2007

UK sukuk conference & controversy about Islamic hedge funds

There will be a conference in London, UK from June 20-21, "The Sukuk Summit - Strategies for Today: Demystifying Islamic Capital Markets (ICM) Products". The details and links to the summit website and press release are available from the IHI conferences listing for June 2007

Islamic hedge funds are controversial. One speaker on the topic at a conference in Bahrain told conference participants "he had nothing to say because [Islamic hedge funds] do not exist" due to the prohibition of 'selling what you don't own'. Others argue that the basic hedging strategies are Islamic in intent by providing risk control.

The Dana Gas convertible sukuk announced yesterday is part of a growing wave of convertible bond issues in the Gulf Cooperation Council (GCC) driven by the recent poor performance of the regon's equity markets.

Middle Eastern investors, likely from Kuwait or Qatar, will finance a Shari'ah-compliant real estate investment project in Japan.

Prudential, the U.K. insurance company, signed a Memorandum of Understanding yesterday with Saudi bank Aljazira to take a 39 percent stake in the bank's takaful business, Ta'awuni, as well as part of the bank's fund management business.

"ETFs could track the benchmark index, or certain growth sectors, or even Islamic finance. " --The Star (Malaysia)

1 comment:

ilanit said...

Los Angeles business investors fund performance is not indexed to inflation. In 1980s many risk free rates round the world were in double figures. Hedge funds in those days HAD to produce much higher returns to be worth investing in. A few strategies do benefit from rising rates; for example managed futures and short biased funds have large cash balances. Put option prices drop as rates rise so some hedging costs reduce. But some hedge fund strategies are negatively exposed to rising rates, costlier credit, steeper yield curve twists and shifts and less reliable interest rate differentials between currencies.