The credit crisis has damaged London's reputation as a financial center, but the growth in Islamic finance, particularly sukuk has provided an alternative source of strength as the U.K. is fast becoming the largest hub for Islamic finance in the West. The growth of Islamic finance, aided by flexible regulators at the Financial Services Authority (FSA) who look to create an even playing field for both conventional and Shari'ah-compliant finance, has given the U.K. a significant edge in attracting Islamic finance. Other western countries like the U.S., and other European countries have not been as proactive in attracting Islamic finance and are now being forced to run to catch up with the U.K.
Oops, says the U.K. Treasury when the rules on the stamp tax to accommodate Shari'ah-compliant home financing are used by commercial builders to circumvent taxes. The Treasury says it will fix the problem while still maintaining the equal treatment of conventional and Shari'ah-compliant home financing products.
A freelance piece in Gulfnews posits that the Shari'ah screens, particularly those around debt and interest, remove the riskiest companies from the universe of Shari'ah-compliant investments. This is certainly the case for avoiding the subprime crisis and most of the leveraged private equity problems. A year or two ago, it was very tempting for private equity firms to borrow large amounts of money to purchase companies because the economy was working fine and interest rates were low, so interest payments were low, even for very highly leveraged companies. However, as a Wall Street Journal article (quoted in Seeking Alpha) points out, private equity firms "are pushing companies further out on a limb in the process. In some cases, this gives their newly private companies little breathing room to execute growth plans and stay afloat were economic and market conditions to turn sour." The last six months have seen "economic and market conditions turn sour" and now these highly leveraged firms are running into difficulty. If the investments adhered to the debt and interest limits required for them to be Shari'ah-compliant, some returns may have been sacrificed at the height of the market, but the downturn would not be nearly as harsh.
Sheikh Taqi Usmani's criticisms that 85 percent of GCC-based sukuk created a stir in the Islamic finance industry and the Accounting and Auditing Organization for Islamic financial institutions (AAOIFI) is receiving criticism for its handling of Sheikh Usmani's comments.
Sheikh Ahmed bin Mohammed al-Khalifa, Bahrain's minister of finance has suggested that the Islamic financial industry in the GCC is composed of too many smaller firms and needs larger Islamic banking firms to undertake 'megaprojects'.
The American Public Media show, Marketplace, has a few recent stories on Islamic finance, including an interview with Mahmoud El-Gamal and segments on Shari'ah compliant mortgages, student loans, mutual funds and finally a segment in which American Muslims are asked about what they think about Islamic finance.
Although this story is not specifically about Islamic finance, I thought it should be included because, in the current environment of misunderstandings and near-hysteria about the term 'shari'ah', it is heartening to see a magazine like US News & World Report sit down with an Egyptian mufti to learn about his efforts to educate people about Shari'ah.
Showing posts with label Home financing. Show all posts
Showing posts with label Home financing. Show all posts
Saturday, March 08, 2008
Saturday, February 02, 2008
Stir over Islamic finance study in Canada, criticism of commodity murabaha
Reuters has an article that describes the success of Islamic finance in growing rapidly with a discussion of some of the challenges it faces in the next few years. The main challenge, which has been enumerated many times, is the shortage of skilled practitioners in the field, particularly Shari'ah scholars who are instrumental in adding legitimacy to the industry by certifying products as Shari'ah-compliant.
One area which is not as frequently mentioned is the need to spread awareness of the industry as it moves out of majority Muslim countries in the GCC and Asia into Western countries where Muslims are in the minority. This challenge has been accepted by the Institute of Halal Investing, which is working to demystify Islamic finance globally, with a particular focus of spreading knowledge and understanding of Islamic finance within the United States. The Reuters also mentions an informal poll of Islamic finance practitioners who pick Indonesia, Pakistan and the U.K. as the next significant growth opportunities for Islamic finance.
A further challenge to the industry is the wide use of murabaha, particularly commodity murabaha, by Islamic banks to invest surplus cash. Recent criticisms from within the Islamic finance industry have focused on repurchase agreements in ijara sukuk but Ruggiero Lomonaco, of ABN Amro and Aznan Bin Hasan, an assistant professor at the International Islamic University Malaysia both made strong criticisms of commodity murabaha at the recent Islamic Finance Forum in Dubai.
Mr. Lomonaco suggested that because the commodity murabaha often doesn't involve the delivery of the metals involved, it may reduce the legitimacy of Islamic finance and could "cause the fall of the industry in a very short period of time". Mr. Bin Hasan, in addition to criticizing the practice, suggested that where other options are not available, Islamic financial institutions could use commodity murabaha out of necessity. One alternative, using a wa'ad swap where the returns are determined by external benchmarks that was suggested by Mr. Lomonaco was the subject of a forceful criticism in a paper by Sheikh Yusuf DeLorenzo, a prominent Shari'ah scholar.
Moody's warns that Islamic financial institutions face significant risk if they are not seen as being fully Shari'ah compliant. In addition, the use of new products with different risk profiles from conventional financial products makes it difficult for Islamic banks to know the true risks. The presence of Islamic finance predominantly in emerging economies also means there is greater systemic risk to the industry as a whole because regulatory systems are less developed than in Western nations.
Disagreements over whether Islamic finance is beneficial to Muslims in Canada has lead to open disagreement over a Canadian Mortgage and Housing Corporation study about Islamic banking. Critics like Tarek Fatah, founder of the Muslim Canadian Congress call Islamic finance a "con job". Islamic financial institutions like UM Financial, headed by Omar Kalair, disagree and say that Islamic finance is not being forced upon Muslims in the country and provides a valuable tool for those Muslims who would not otherwise participate in the financial industry or purchase homes because of the interest charges in conventional mortgages. The Canadian Mortgage and Housing Corporation, stuck between the opposing groups, says the study is needed to understand the growing industry. CMHC vice president in charge of policy and planning Douglas Stewart says that the CMHC "wanted to get a better understanding of the nature of this type of lending and what some of the implications might be for the Canadian housing system."
Despite the credit crunch spreading across the world financial system, most bankers and analysts in the Islamic finance industry expect a similar volume of sukuk issues in 2008 as 2007, about $12 billion.
The growth of Islamic finance outside of the GCC along with it reaching 'critical mass' in places like Dubai is a significant development for the industry says Majid Dawood, the CEO of Yasaar Research, Inc.
Yasaar Research recently worked as independent Shari'ah consultants for the FTSE Shari'ah Indexes. The new indices, in addition to being overseen by an independent Shari'ah organization, are also using financial ratios calculated using total assets, rather than 12 month trailing market capitalization. The use of the latter as the denominator in the financial ratios has attracted criticism that it forces Shari'ah-compliant investment managers to buy high (when the market capitalization is large enough to drive the ratio lower) and sell low (when falling market capitalization increases the value of the ratios above the level allowed by the Shari'ah screens.
In another development for indices based upon religious and ethical principles, Dow Jones Indexes, the creator of the Dow Jones Islamic Market Index, one of the most commonly used benchmarks for Shari'ah-compliant funds, has launched the Dow Jones Dharma Indexes. The Dharma indexes use screens that aim to appeal to Hindus, Bhuddists, Jains and Sikhs. Briefly, the screens exclude companies that create violence and do not promote sustainable stewardship.
The Harvard Business Review included a paper on Islamic finance in its list of breakthrough ideas for 2008.
A website critical of the World Bank and IMF has a description of how the multilateral organizations approach Islamic finance.
The Islamic Development Bank is moving forward in the development of an anti-poverty fund called the National Islamic Fund. The board of directors are scheduled to meet in Tehran on February 17th.
One area which is not as frequently mentioned is the need to spread awareness of the industry as it moves out of majority Muslim countries in the GCC and Asia into Western countries where Muslims are in the minority. This challenge has been accepted by the Institute of Halal Investing, which is working to demystify Islamic finance globally, with a particular focus of spreading knowledge and understanding of Islamic finance within the United States. The Reuters also mentions an informal poll of Islamic finance practitioners who pick Indonesia, Pakistan and the U.K. as the next significant growth opportunities for Islamic finance.
A further challenge to the industry is the wide use of murabaha, particularly commodity murabaha, by Islamic banks to invest surplus cash. Recent criticisms from within the Islamic finance industry have focused on repurchase agreements in ijara sukuk but Ruggiero Lomonaco, of ABN Amro and Aznan Bin Hasan, an assistant professor at the International Islamic University Malaysia both made strong criticisms of commodity murabaha at the recent Islamic Finance Forum in Dubai.
Mr. Lomonaco suggested that because the commodity murabaha often doesn't involve the delivery of the metals involved, it may reduce the legitimacy of Islamic finance and could "cause the fall of the industry in a very short period of time". Mr. Bin Hasan, in addition to criticizing the practice, suggested that where other options are not available, Islamic financial institutions could use commodity murabaha out of necessity. One alternative, using a wa'ad swap where the returns are determined by external benchmarks that was suggested by Mr. Lomonaco was the subject of a forceful criticism in a paper by Sheikh Yusuf DeLorenzo, a prominent Shari'ah scholar.
Moody's warns that Islamic financial institutions face significant risk if they are not seen as being fully Shari'ah compliant. In addition, the use of new products with different risk profiles from conventional financial products makes it difficult for Islamic banks to know the true risks. The presence of Islamic finance predominantly in emerging economies also means there is greater systemic risk to the industry as a whole because regulatory systems are less developed than in Western nations.
Disagreements over whether Islamic finance is beneficial to Muslims in Canada has lead to open disagreement over a Canadian Mortgage and Housing Corporation study about Islamic banking. Critics like Tarek Fatah, founder of the Muslim Canadian Congress call Islamic finance a "con job". Islamic financial institutions like UM Financial, headed by Omar Kalair, disagree and say that Islamic finance is not being forced upon Muslims in the country and provides a valuable tool for those Muslims who would not otherwise participate in the financial industry or purchase homes because of the interest charges in conventional mortgages. The Canadian Mortgage and Housing Corporation, stuck between the opposing groups, says the study is needed to understand the growing industry. CMHC vice president in charge of policy and planning Douglas Stewart says that the CMHC "wanted to get a better understanding of the nature of this type of lending and what some of the implications might be for the Canadian housing system."
Despite the credit crunch spreading across the world financial system, most bankers and analysts in the Islamic finance industry expect a similar volume of sukuk issues in 2008 as 2007, about $12 billion.
The growth of Islamic finance outside of the GCC along with it reaching 'critical mass' in places like Dubai is a significant development for the industry says Majid Dawood, the CEO of Yasaar Research, Inc.
Yasaar Research recently worked as independent Shari'ah consultants for the FTSE Shari'ah Indexes. The new indices, in addition to being overseen by an independent Shari'ah organization, are also using financial ratios calculated using total assets, rather than 12 month trailing market capitalization. The use of the latter as the denominator in the financial ratios has attracted criticism that it forces Shari'ah-compliant investment managers to buy high (when the market capitalization is large enough to drive the ratio lower) and sell low (when falling market capitalization increases the value of the ratios above the level allowed by the Shari'ah screens.
In another development for indices based upon religious and ethical principles, Dow Jones Indexes, the creator of the Dow Jones Islamic Market Index, one of the most commonly used benchmarks for Shari'ah-compliant funds, has launched the Dow Jones Dharma Indexes. The Dharma indexes use screens that aim to appeal to Hindus, Bhuddists, Jains and Sikhs. Briefly, the screens exclude companies that create violence and do not promote sustainable stewardship.
The Harvard Business Review included a paper on Islamic finance in its list of breakthrough ideas for 2008.
A website critical of the World Bank and IMF has a description of how the multilateral organizations approach Islamic finance.
The Islamic Development Bank is moving forward in the development of an anti-poverty fund called the National Islamic Fund. The board of directors are scheduled to meet in Tehran on February 17th.
Monday, October 08, 2007
Last week's news
Apologies for the delay in posting since last week, but I have been furiously working on our 501(c)(3) application. I will hopefully resume regular blogging by later this week. --Blake
In response to the credit crunch, Dubai Ports World is planning an IPO to avoid the higher yield promised to the sukuk holders of the $3.5 billion convertible sukuk if a share floatation was cancelled. The sukuk was issued to fund the purchase of Peninsular & Oriental Steam Navigation, a U.K. ports group.
Rs. 55 billion ($906 million) in direct investments, mostly from GCC investors has flowed to the Pakistani Islamic banking industry this year as of the end of September.
Sukuk continue to be issued at a furious pace.
GCC-Asian links in Islamic finance grow as the Central Bank of Bahrain licensed the Islamic Bank of Asia to open an office in the country. The Islamic Bank of Asia became the first Islamic bank to receive a license in Singapore earlier this year.
The International Finance Corporation, the private lending arm of the World Bank, will finance investors setting up Islamic banks in Kenya.
Islamic home financing takes another leap forward in the U.K.
Shari'ah Capital will work with the Dubai Multi Commondities Centre to develop Shari'ah-compliant investment products "based on hard assets such as commodities and precious metals".
A letter in the Financial Times last week addressed the potential for soverign wealth funds particularly in the GCC region to move their assets towards Islamic finance.
In response to the credit crunch, Dubai Ports World is planning an IPO to avoid the higher yield promised to the sukuk holders of the $3.5 billion convertible sukuk if a share floatation was cancelled. The sukuk was issued to fund the purchase of Peninsular & Oriental Steam Navigation, a U.K. ports group.
Rs. 55 billion ($906 million) in direct investments, mostly from GCC investors has flowed to the Pakistani Islamic banking industry this year as of the end of September.
Sukuk continue to be issued at a furious pace.
GCC-Asian links in Islamic finance grow as the Central Bank of Bahrain licensed the Islamic Bank of Asia to open an office in the country. The Islamic Bank of Asia became the first Islamic bank to receive a license in Singapore earlier this year.
The International Finance Corporation, the private lending arm of the World Bank, will finance investors setting up Islamic banks in Kenya.
Islamic home financing takes another leap forward in the U.K.
Shari'ah Capital will work with the Dubai Multi Commondities Centre to develop Shari'ah-compliant investment products "based on hard assets such as commodities and precious metals".
A letter in the Financial Times last week addressed the potential for soverign wealth funds particularly in the GCC region to move their assets towards Islamic finance.
Friday, August 24, 2007
Indian Islamic finance, African retakaful & British Islamic home financing
India may see Islamic banks allowed soon.
A the Cote D'Ivoire offices of Nigeria-based reinsurance company, Africa Reinsurance Corporation, is increasing its authorized share capital to fund a re-takaful venture.
A description of the Islamic home financing available in Britain, murabaha and ijara.
A the Cote D'Ivoire offices of Nigeria-based reinsurance company, Africa Reinsurance Corporation, is increasing its authorized share capital to fund a re-takaful venture.
A description of the Islamic home financing available in Britain, murabaha and ijara.
Monday, August 13, 2007
Islamic financing in the U.S., Mauritius
Muslims in New York and Nevada feel the challenge of lack of availability of Shari'ah-compliant home finance.
Mauritius' government grapples with the unique challenges in adapting a regulatory system designed for conventional financial institutions to be flexible enough to accomodate Islamic banks.
Mauritius' government grapples with the unique challenges in adapting a regulatory system designed for conventional financial institutions to be flexible enough to accomodate Islamic banks.
Thursday, July 05, 2007
Islamic banking in Malaysia, home finance in New Zealand, Bloomberg TV on Islamic finance
Islamic banking has over 12% of the banking market and takaful has 6% of the insurance market in Malaysia.
"The [Islamic banking] industry has reached a point where, in some product areas, it can provide a credible alternative to traditional banking products" according to a report by Financial Insights.
Bloomberg television will have a show with a focus on Islamic finance this weekend.
Islamic home finance becoming possible in New Zealand.
"The [Islamic banking] industry has reached a point where, in some product areas, it can provide a credible alternative to traditional banking products" according to a report by Financial Insights.
Bloomberg television will have a show with a focus on Islamic finance this weekend.
Islamic home finance becoming possible in New Zealand.
Monday, July 02, 2007
Islamic banking, durra and IFC investment in Islamic finance
The International Centre for Education in Islamic Finance (INCEIF) held a conference in Yemen about the challenges facing Islamic banks. Another conference in Bahrain discussed the growing prominence of Islamic banking. In Kenya, the lack of a Shari'ah-compliant interbank money market raises questions about the viability of Islamic banks in the market, particularly the recently opened First Community Bank.
Women in the UAE's Islamic finance industry are pushing for a greater number of female senior executives.
The International Finance Corporation (IFC), the private sector arm of the World Bank, will invest in Islamic mezzanine notes issued by Tamweel. The issue will be the first Shari'ah-compliant multitranche mortgage-backed security in the UAE. IFC hopes its investment will help "develop long-term capital markets in the GCC and expand availability of Islamic finance products" according to Lee Meddin, the IFC Deputy Treasurer and Global Head of Structured Finance.
The Waqf Fund established by the Central Bank of Bahrain in 2006 will have a special fund to support Islamic finance education & training.
Gulf Finance House GDR priced at $2.5 per share.
Women in the UAE's Islamic finance industry are pushing for a greater number of female senior executives.
The International Finance Corporation (IFC), the private sector arm of the World Bank, will invest in Islamic mezzanine notes issued by Tamweel. The issue will be the first Shari'ah-compliant multitranche mortgage-backed security in the UAE. IFC hopes its investment will help "develop long-term capital markets in the GCC and expand availability of Islamic finance products" according to Lee Meddin, the IFC Deputy Treasurer and Global Head of Structured Finance.
The Waqf Fund established by the Central Bank of Bahrain in 2006 will have a special fund to support Islamic finance education & training.
Gulf Finance House GDR priced at $2.5 per share.
Monday, June 11, 2007
Shari'ah-compliant home financing, sukuk and book reviews
Shari'ah-compliant home financing in Canada is up to 600 basis points more expensive than a conventional mortgage. This compares with around a 100 basis point spread between Islamic and conventional mortgages in the United States and results from a lower amount of activity. It probably also reflects the absence of a the U.S. government sponsored organization Freddie Mac (Federal Home Loan Mortgage Corporation) which buys mortgages from lenders packages & sells them as mortgage-backed securities in the secondary markets. Freddie Mac injects greater liquidity into the mortgage markets which allows lenders to serve more customers. Several Islamic financial institutions in the U.S. sell Shari'ah-compliant home financing to Freddie Mac (University Bank, Guidance Financial, Devon Bank and American Finance House-LARIBA).
Sub. Rqd.: The Financial Times reporter Farhan Bokhari writes on Lloyd's TSB decision to offer Shari'ah-compliant business products.
International Investment Group KSCC, a Kuwaiti financing company issued $200 million in unrated convertible sukuk. Ekttatab (formerly Kazma Holding) is seeking to raise $148 million from a share issue for investment in Shari'ah-compliant IPOs. UAE-based Amlak Finance will sell $272 million of sukuk.
The emergence and evolution of sukuk.
Waqf in Guernsey.
Terence Tan writes two book reviews in The Star (Malaysia). An Introduction to Islamic Finance (by Zamir Iqbal and Abbas Mirakhor) is "the first book to introduce all of the essential topics [in Islamic finance] in one volume" while Islamic Finance: The Regulatory Challenge (by Simon Archer and Rifaat Ahmed Abdel Karim) gives a " well aligned [and] consensus view on the [regulatory] way forward"
Sub. Rqd.: The Financial Times reporter Farhan Bokhari writes on Lloyd's TSB decision to offer Shari'ah-compliant business products.
International Investment Group KSCC, a Kuwaiti financing company issued $200 million in unrated convertible sukuk. Ekttatab (formerly Kazma Holding) is seeking to raise $148 million from a share issue for investment in Shari'ah-compliant IPOs. UAE-based Amlak Finance will sell $272 million of sukuk.
The emergence and evolution of sukuk.
Waqf in Guernsey.
Terence Tan writes two book reviews in The Star (Malaysia). An Introduction to Islamic Finance (by Zamir Iqbal and Abbas Mirakhor) is "the first book to introduce all of the essential topics [in Islamic finance] in one volume" while Islamic Finance: The Regulatory Challenge (by Simon Archer and Rifaat Ahmed Abdel Karim) gives a " well aligned [and] consensus view on the [regulatory] way forward"
Wednesday, May 23, 2007
Canadian Islamic mortgages, Standardization
At the Islamic Finance World North America conference organized in Canada on Islamic finance, participants discussed the requirements needed to fit Islamic financing, particularly home financing, into the regulatory environment of Canada which restricts financial institutions' holdings of real estate. Because Islamic home financing is less common in Canada than the U.S., the products are significantly more expensive in Canada where they are 100 to 300 basis points more expensive compared to 40 to 100 basis points higher in the U.S.
The Central Bank of Bahrain will issue standardized Islamic financial products by the end of this year.
Ernst & Young will launch the 1st annual "Islamic Funds & Investments Report" soon.
Dubai Islamic Investments Managing Director Marwan Al Khatib believes that the Malaysian government's active encouragement and participation in the development of the country's Islamic financial industry was important for its success.
Philippine Banco de Oro may be interested in bidding on Al-Amanah Islamic Investment Bank of the Phillipines which the government is trying to privatize.
The Central Bank of Bahrain will issue standardized Islamic financial products by the end of this year.
Ernst & Young will launch the 1st annual "Islamic Funds & Investments Report" soon.
Dubai Islamic Investments Managing Director Marwan Al Khatib believes that the Malaysian government's active encouragement and participation in the development of the country's Islamic financial industry was important for its success.
Philippine Banco de Oro may be interested in bidding on Al-Amanah Islamic Investment Bank of the Phillipines which the government is trying to privatize.
Monday, April 23, 2007
U.K. Islamic gilts, Islamic finance in the U.S. & U.K. and Careers in Islamic banking
U.K. becomes first Western country to announce Shari'ah-compliant government bonds
Ed Balls, Economic Secretary in HM Treasury, announced today that the U.K. government will carry out a feasibility study regarding the issuance of Shari'ah-compliant gilts. He was speaking at the FSA confence on Principles-based Regulation.
Global Impact of Islamic Finance
The Harvard Business School student weekly Harbus has an article about the recent event on Islamic finance held at the school on April 13th, 2007.
Islamic home financing & sukuk
A Chicago-based newspaper, the Daily Herald, describes how Islamic home financing works and provides a summary of some of the U.S. Islamic finance companies. The Financial Times provides another general overview of Islamic finance and sukuk.
Careers in Islamic banking - Challenges
The Financial Times describes the challenges facing those who seek careers in Islamic banking with a conventional financial background and education. Because Islamic finance and banking requires an understanding of what is Shari'ah-compliance, as well as how to work with Shari'ah scholars to ensure that all products offered are compliant, those with backgrounds in conventional finance may not be able to succeed in the field. Several business schools including the Cass Business School and ESC-Lille offer MBA programs in Islamic finance.
Other News
Pakistan's sixth Islamic bank, First Dawood Islamic Bank, will expand its branch network.
Ed Balls, Economic Secretary in HM Treasury, announced today that the U.K. government will carry out a feasibility study regarding the issuance of Shari'ah-compliant gilts. He was speaking at the FSA confence on Principles-based Regulation.
Global Impact of Islamic Finance
The Harvard Business School student weekly Harbus has an article about the recent event on Islamic finance held at the school on April 13th, 2007.
Islamic home financing & sukuk
A Chicago-based newspaper, the Daily Herald, describes how Islamic home financing works and provides a summary of some of the U.S. Islamic finance companies. The Financial Times provides another general overview of Islamic finance and sukuk.
Careers in Islamic banking - Challenges
The Financial Times describes the challenges facing those who seek careers in Islamic banking with a conventional financial background and education. Because Islamic finance and banking requires an understanding of what is Shari'ah-compliance, as well as how to work with Shari'ah scholars to ensure that all products offered are compliant, those with backgrounds in conventional finance may not be able to succeed in the field. Several business schools including the Cass Business School and ESC-Lille offer MBA programs in Islamic finance.
Other News
Pakistan's sixth Islamic bank, First Dawood Islamic Bank, will expand its branch network.
Wednesday, April 18, 2007
Equity mortgage investment, poverty alleviation and Islamic microfinance
Equity investment in mortgages
On his blog, Mahmoud El-Gamal points out a Business Week article describing parents' investing in their children's mortgages. The product, in which the investor provides some financing, often towards the down payment in exchange for a share of the equity appreciation of the house at some point in the future resembles a musharaka partnership where the profits and losses (in this case, appreciation of the house value) are shared. It provides an example of where conventional financial products overlap with Islamic products (see, for example, the ISNA Canada's Ansar Co-operative Housing Corporation Ltd.).
Islamic microfinance conference in Brunei
The recent conference in Brunei on micro-, small- and medium-sized businesses and Islamic finance turned its focus to poverty alleviation and particularly the important contribution Islamic financial institutions can and need to play.
Other News
Sukuk is growing rapidly in the GCC.
Arcapita Bank celebrates its recent five-year $1.1 billion syndicated murabaha. [Press Release (pdf) from Arcapita]
The Islamic finance industry in the U.K. continues to expand. Today, the former Finance Director of the Islamic Bank of Britain joins the Nottingham Building Society in the same position to focus on the development of Islamic financial products at the Society.
On his blog, Mahmoud El-Gamal points out a Business Week article describing parents' investing in their children's mortgages. The product, in which the investor provides some financing, often towards the down payment in exchange for a share of the equity appreciation of the house at some point in the future resembles a musharaka partnership where the profits and losses (in this case, appreciation of the house value) are shared. It provides an example of where conventional financial products overlap with Islamic products (see, for example, the ISNA Canada's Ansar Co-operative Housing Corporation Ltd.).
Islamic microfinance conference in Brunei
The recent conference in Brunei on micro-, small- and medium-sized businesses and Islamic finance turned its focus to poverty alleviation and particularly the important contribution Islamic financial institutions can and need to play.
Other News
Sukuk is growing rapidly in the GCC.
Arcapita Bank celebrates its recent five-year $1.1 billion syndicated murabaha. [Press Release (pdf) from Arcapita]
The Islamic finance industry in the U.K. continues to expand. Today, the former Finance Director of the Islamic Bank of Britain joins the Nottingham Building Society in the same position to focus on the development of Islamic financial products at the Society.
Tuesday, April 03, 2007
Economic goals in Islamic countries & other news
Economic goals in Islamic countries
Farooq Tirmizi, a student at the Georgetown University School of Foreign Service with a column in the student newspaper The Hoya, has a very interesting article about the role of Islamic finance in defining "in a uniquely Islamic manner, the economic goals that governments must pursue".
Other news
EPF purchase of stake in Rashid Hussain Bhd was not a bailout says the Malaysian government's Second Finance Minister Tan Sri Nor Mohamed Yakcop.
Lloyds TSB will offer Shari'ah-compliant business financing.
Shari'ah-compliant home financing will grow significantly in the U.K.
Farooq Tirmizi, a student at the Georgetown University School of Foreign Service with a column in the student newspaper The Hoya, has a very interesting article about the role of Islamic finance in defining "in a uniquely Islamic manner, the economic goals that governments must pursue".
Other news
EPF purchase of stake in Rashid Hussain Bhd was not a bailout says the Malaysian government's Second Finance Minister Tan Sri Nor Mohamed Yakcop.
Lloyds TSB will offer Shari'ah-compliant business financing.
Shari'ah-compliant home financing will grow significantly in the U.K.
Tuesday, March 06, 2007
Amlak Finance to open in Egypt
Amlak Finance, the subsidiary of Dubai-based Emaar Properties will open a home finance firm in Egypt to capitalize on an estimated 1.5 percent growth in the property market and a 145,000 house per year shortfall.
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