Monday, February 23, 2009

New funds, backlogged sukuk, Hong Kong almost ready with tax changes for Islamic financial products

HSBC Amanah plans to make its equity funds available in the UK. The description of the funds are "active quant" funds. Quant funds typically aim to capitalize of small, short-term arbitrage opportunities using complicated computer models. It is unclear how this type of investment strategy was approved by Shari'ah scholars because it is in some ways highly speculative (probably would raise questions of whether it resembles maysir, or gambling). There are probably ways that this can be explained away, but whether or not they are satisfactory for many investors is unclear.

Other News
  • A lecture at Wesleyan University focused on Islamic finance and was given by the Muslim chaplains from Harvard University.
  • Malaysia and the UAE were the top sources of sukuk issuers in 2008.
  • Indonesia's retail sukuk raised Rp 5.6 trillion ($467 million).
  • Hong Kong's government is in the last stages of finalizing tax law changes to encourage Islamic finance by placing it on equal footing with conventional financial products.
  • Asian Finance Bank, the Malaysian-based Islamic bank sees an opportunity to facilitate South Korean companies' fund raises in the GCC.
  • There are an estimated 100 sukuk in the pipeline worth up to $38 billion that have not come to market because of the global credit crisis. It is unclear whether the lack of availability of access to capital markets will force some of these companies into bankruptcy or to eliminate expansion plans these sukuk were envisioned to fund.

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