All posts related to KL Conference on Islamic Wealth Management & Financial Planning 2016 - KLC-IWM-2016

Thursday, 7 July 2016

Event Summary (KLCIWM2016) - KL Conference on Islamic Wealth Management & Financial Planning 2016

KL International Conference on
Islamic Wealth Management & Financial Planning

Date    : 27-28 September 2016
Venue : Grand Seasons Kuala Lumpur, Malaysia
“An international gathering of practitioners, scholars and experts to discuss and share their knowledge, expertise and experience on the principles, instruments and issues related to Islamic wealth management and financial planning to be held at the world’s leading Islamic financial centre…Kuala Lumpur.”

This 2-day conference will explore the key principles and avenues of Islamic wealth management which includes Islamic wealth creation, accumulation, protection, distribution and purification in the Wealth Management Cycle. This conference will enable individuals, investors and corporations to learn and understand more about the Islamic wealth management and financial planning from industry experts with wide spectrum of expertise and will be able to implement them. This conference will also be an excellent platform for networking and exchange of experience, ideas  and outlooks about the industry and services.

- Islamic Financial Planning & Wealth Management: Principles, Products & Services
- Sharing the Wealth Using Exchange Instruments
- Islamic Funds Management & Investment
- Retirement Planning: Managing Wealth for Golden Years
- Islamic Estate Management (Faraid, Wills, Hibah, Waqf)
- Risk Management and Takaful (Wealth Protection)
- Zakat: Wealth Redistribution and Purification
- The Need For Prudent Financial Management

- Financial planners
- Wealth advisors
- Financial consultants
- Bankers
- Insurance operators
- Unit trust agents
- Insurance / Takaful agents
- Remisiers
- Lawyers
- Academicians
- Entrepreneurs
- Other professionals


Ahmad Sanusi Husain
CEO & Chief Consultant, Alfalah Consulting
(Certified Islamic Financial Planner)

Others to be confirmed

Early Bird Fee: 
Registration with payment by 26 August 2016
Malaysian   :  RM1,500
International  :  USD600

Normal Fee:
Registration with payment after 26 August 2016
Malaysian  :  RM1,800
International  :  USD700
Special fee for Malaysian university lecturers :  RM1,000 (group discount not applicable)

Fee is inclusive of lunch, refreshments and seminar package only.

Group Discount:
Enjoy 10% discount for 3 or more delegates registered from the same organisation and the same billing source.





Grand Seasons Kuala Lumpur, Malaysia


Kuala Lumpur

Mismanagement, lack of security unfold in Zakat distribution

Distribution of clothes for Zakat ahead of Eid-ul-Fitr is going on in the country amid mismanagement and lack of security.
Some 15 to 20 poor women and men wearing shabby clothes were seen trying to enter into a shop through its half-opened door at East Tejturi Bazar in Dhaka’s Farmgate area to collect Zakat clothes.
The distributors did not probably bother to maintain any system to ensure security of these poor people, including also some old people, who were trying to get their much expected Zakat by pushing one another.
Men were not giving any space to the women first fearing to be deprived of the ‘gift’ distributed by a private company probably.  
On being asked about the security of these people, an employee of the company told The Daily Star that they didn’t have any other option except keeping the door half-opened.Some people have been seen very pleased after getting the ‘gift’ of Zakat clothes while others were seen fighting to get theirs.

However, he failed to reply what would happen if any life is lost in any untoward incident.
It is definitely a good gesture that any individual or private institution wants to help the poor. But none can ignore the security concern for these underprivileged people.

(The Star Online Report / 04 July 2016)
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Malaysia: Sukuk issuance to remain muted 6 to 18 months, says S&P

KUALA LUMPUR:  S&P Global Ratings expects Sukuk issuance will remain muted over the next six to 18 months, with total issuance of US$50bil to US$55bil in 2016.

It said on Monday that Sukuk issuance in the second half of 2016 will continue to depend on monetary policy developments and volatility in developed markets and also policy actions of sovereigns in core markets – namely Gulf Cooperation Council countries and Malaysia – in response to lower oil prices.

The ratings agency said explained that plummeting oil prices have not boosted sukuk issuance despite some commentators' expectations low oil prices would spur governments in oil-exporting countries to tap the Sukuk market for funding, and maintain current and capital spending.

Instead, total issuance actually dropped in 2015 compared with the previous year, it explained in its report entitled, “Why low oil prices aren't sending Sukuk issuance skyward”.
S&P Global Ratings Global head of Islamic finance Mohamed Damak said: “The complexity of Sukuk issuance, uncertainty regarding US Federal Reserves' policy revisions, and the government's efforts to reduce financing needs in response to weak oil prices have and will continue to weigh on Sukuk market activity.”

He said while governments affected by the price drop are looking to spending cuts, taxation, and the privatisation of state companies to adjust to the new reality, their financing needs remain significant.

"Part of these needs will be met by conventional debt markets and, to a much lesser extent, the Sukuk market, with the complexity of Sukuk issuance remaining a key deterrent to tapping the market, in our view," Damak said. 
At the same time, he believes the European Central Bank's quantitative easing programme and the entrance of a few new issuers to the Sukuk market will continue to support issuance volumes.

(The Star Online / 04 July 2016)
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Monday, 13 June 2016

China Turns To Islamic Finance To Drive Economic Initiative

In 2013, Chinese President Xi Jinping unveiled the Silk Road Economic Belt and the 21st-century Maritime Silk Road initiative now known as One Belt One Road, (OBOR) in order to actively develop connectivity and economic cooperation with countries mainly between China and Eurasia. The initiative aims to build a community of shared interests, destiny and responsibility with mutual political trust, economic integration and cultural inclusiveness. Initiating investment and developing economic trade communications with Islamic countries is one of important components of the OBOR strategy and this is detailed in the "Vision and Actions on jointly building the Silk Road Economic Belt and 21st-century Maritime Silk Road" published by the government on 28th March, 2015 ("Vision and Actions").
Compared to traditional financial products, Islamic finance has developed significantly due to its high flexibility of business, low risk, low debt requirements and the need to use real estate as collateral. In 2014, Sharia compliant financial institutions represented approximately 1% of total world assets, at around US$2 trillion. The latest study shows that, by 2020, the value of the global Islamic financial market will rise to US$3.25 trillion.
Financial integration is one of the key areas of cooperation set out in the Vision and Actions. The Chinese government emphasises that financial integration is a crucial element in the construction of the OBOR and has decided to speed up the incorporation and operation of the Silk Road fund. Proposals to strengthen the practical cooperation of China-ASEAN Interbank Association and to carry out multilateral financial cooperation in the form of syndicated loans and bank credit has also been completed. Qualified Chinese financial institutions and companies are encouraged to issue bonds in both Renminbi and foreign currencies outside China, and use the funds raised to invest in countries along the OBOR.
As background to the strategic execution of the OBOR, State Owned and private enterprises in China are also trying to make use of Islamic finance, as against traditional finance, to serve their own overseas development. Chinese banks are strengthening their cooperation with Muslim countries, and are busy developing their overseas business and outbound investment. Islamic finance is rapidly becoming an established channel for China to enlarge its overseas economic influence.
Issuing Islamic securities is an important mechanism for Chinese enterprises to raise funds and expand in Muslim countries. Although Islamic finance does not offer interest, there are still opportunities to ensure financial benefits and remuneration primarily through issuing Islamic securities (Sukuk). Investors who purchase such securities would not obtain interest as an income; however, they could be given remuneration in terms of investment gains.
It has been reported that a High Speed Rail project in China is considering using Islamic securities to raise a fund for almost 30 billion Chinese yuan (US$4.7billion). If successful, this would be one of the largest Islamic securities fund ever raised. 
In addition, Hainan Airlines Group is planning to raise US$150 million for ship purchasing, and this could be the first such deal to be approved by the Islamic finance authorities. Hainan is also planning to raise offshore Islamic securities. Some large banks in China have been raising their influence in the Gulf countries indeed, three of these banks issued traditional securities on NASDAQ Dubai, while others are in the planning stages. 
Country Garden, the Chinese mainland real estate agents announced their intention in October 2015 to issue Islamic medium-term notes with a nominal value of MYR1.5 billion (US$340million) through their wholly-owned subsidiary in Malaysia. This is the first case of the Chinese real estate sector raising funds offshore through Islamic finance mechanisms.
Apart from issuing Islamic securities, local Chinese government authorities and enterprises who need to raise funds will do so in Islamic countries with substantial oil capital, fundamental infrastructure and energy projects such as coal, chemicals, wind power and solar generation. These are in compliance with the investment preference of the Islamic finance system on projects with long term, low risk, steady income and the "Go Abroad" strategy of Islamic countries as part of their financial globalization. This has highlighted efforts through the promotion of local development of China to absorb foreign investment and maintain local stability.
However, we must also note that due to the characteristic of Islamic finance, and how it differs from traditional finance, there are numerous difficulties and challenges Chinese enterprises would have to face when using this structure. Unfamiliarity with the Islamic finance process is the prime issue for Chinese enterprises compared with traditional finance. Islamic finance, as a special financing system, has to follow the teachings of Islam, and as such certain areas are forbidden including the payment of interest, speculation, investments in alcohol and gambling, and both risk and interest share. In order to fully use Islamic finance, Chinese enterprises must learn the fundamental system and regulation that govern this financing mechanism and understand it business practices
Constraints on current policies and systems also have an impact on China's development of Islamic finance. In 2009, the Bank of Ningxia was approved as a trial centre for Islamic banking business, and is the first bank in China to do so. There was a further suggestion that Ningxia could be developed as a pilot region of financial cooperation between China and the Gulf states, becoming the Islamic finance centre of China, like Dubai in the Gulf and Kuala Lumpur in Malaysia, however, this has not yet been finalised by the government. One likely reason for this is the unique nature of Islamic finance which makes it very difficult to merge into the current financing management system in China. Under the OBOR, China is considering using Islamic finance as a breakthrough to initiate extensive business communication and project cooperation in many areas with Middle East and South East Asian countries. It is considering opening outbound Islamic financing institutions, and participating in the investment in these regions or developing enterprises which operate through Islamic financing products. This is not only safer for funds and better for comprehensive income, but also improves the long term benefits.
Following the initiation of the OBOR it is now developing the practical stages, and there will be a significant increase in the use of Islamic financing tools and investment in major construction projects. If the Chinese government could enhance its cooperation with Muslim countries through Islamic finance, that it will significantly progress the development of the Silk Road project.
About Mr Du, Baozhong
Mr. Du is a senior legal counsel in the Beijing office of Yingke Law Firm. After graduating from China University of Political Science and Law with a master degree, he had been working for the Department of Treaty and Law in China's Ministry of Commerce for 13 years, and was engaged in legal consulting work in a large-scaled state-owned enterprise. Mr. Du, as the delegation member of Chinese Government, has participated in the working group meetings held by the Commission on International Trade of the United Nations several times, and addressed as the Chinese representative on meetings of OECD and APEC. He is specialized in foreign direct investment, outbound investment, international trade, private equity, venture capital, mergers and acquisitions, foreign-related arbitration, labor law, etc.

About Ms. Li, Xuan
Ms. Li is working as a trainee in the International Legal Affairs Department of the Beijing office of Yingke Law Firm, and also acts as the coordinator of Yingke Brussels Office. After graduating from Dalian Maritime University with a bachelor degree in Maritime Law, and a LLM Maritime Law degree at Bentham House, Faculty of Laws, University College London. She used to work in-house in an international shipping company, responsible for marine insurance and admiralty laws. While working in the UK, she served as the assistant analyst for hedge funds at Thomson Reuters London. Her specialisations are maritime law, international trade law and international arbitration.

(Zawya / 09 June 2016)
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Sunday, 12 June 2016

Karama, Takaful, and social justice

Last week I had the pleasure of participating in the conference organised by the Ministry of Social Solidarity to mark one year on the beginning of the Karama and Takaful social programs.
Both programs provide direct cash assistance to the poor, Karama to elderly and disabled people who cannot work and Takaful to the poorest families.
During the meeting, the ministry announced that the two programs now cover three million people in the ten neediest governorates, most of them in Upper Egypt, and work was underway to extend the programs to other eligible beneficiaries in the remaining governorates.
I have been a zealous supporter of these programs since the idea was first proposed in 2008 under then Minister of Social Solidarity Ali El-Meseilhi, who also championed it, but political conditions were then unfavorable and inadequate attention was paid to social issues.
The idea rose and fell in the priorities of successive governments and parliaments, until the government of Ibrahim Mehleb finally made it a reality. Having actually implemented the programs over the last two years, the Ministry of Social Solidarity deserves fulsome praise, since implementation is ultimately the biggest challenge and the true measure of success.
The programs are significant because they diverge from conventional pension schemes and proceed from a fundamentally different understanding: that social justice can be realised by providing a comprehensive umbrella of social protection based on redrawing the poverty map in Egypt, examining wealth and income data, building a comprehensive database of all cash, in-kind, and service support received by citizens, and then using this to draft a plan to deliver subsidies to those who need them and limit waste and corruption in social spending.
This new approach distinguishes the Takaful and Karama programs from their predecessors, making for a more targeted, fairer provision of social protection and giving future decision makers an instrument for the application of other social policies.
There are two important dimensions of this type of targeted program. First, direct cash support is not necessarily an alternative to the in-kind subsidies provided for years in Egypt. It is instead a complementary mechanism allowing cash assistance to go where it is needed.
Second, the principle of targeted subsidies for the poor, whether cash or in-kind, means accepting the periodic review and assessment of recipients’ circumstances, and excluding them if their conditions improve or the grounds for their eligibility no longer apply.
Otherwise, the protection umbrella would continue to expand, ultimately again bringing in people who need no support.
The shift from comprehensive support that makes no distinction between rich and poor, needy and non-needy, lies at the core of a much-needed change. The sad truth is that over the last two decades, the exponential increase in social spending to cover all forms of comprehensive subsidies—which now account for 25 percent of public spending—has not been matched by reductions in the poverty rate. On the contrary, poverty has continued to grow.

This trend cannot be corrected without moving from the concept of comprehensive social protection to targeted spending for poverty and the poor.
But the Karama and Takaful programs are a significant beginning, not the end of the road. Several challenges have yet to be addressed.

First, the programs require ongoing follow-up, revision, and review to remedy implementation problems. In addition, these programs cannot be funded in perpetuity by loans and foreign grants.
The state must devote adequate resources from the public budget to ensure their sustainability without being at the mercy of shifts in political tides and international relations—the programs are a fundamental right, not a nonessential handout.
Moreover, in the longer term, we should not stop with these two programs. A social protection network must be based on sound, standardised data on all pension and support programs, up-to-date, accurate poverty maps, integrated social spending, and the provision of jobs.
I’m pleased that the Ministry of Social Solidarity declared its intention to incrementally build on this system, including by reviving the school meal project—a major pillar of the program that requires a more in-depth look.
However, the greatest challenge is for the state to recognise the importance of popular and community oversight of social protection programs. No matter how hard-working and sincere officials are and regardless of the many regulatory systems, records, and instruments they devise, these programs will inevitably stumble and be corrupted and diverted from their goal if they are not subject to the oversight of parliament, civil society, parties, and associations that represent stakeholders.

Community oversight does not interfere with or obstruct the work of official agencies; it is a necessary, positive contribution and a realisation of every citizen’s right to know how the state is spending its resources and whether it is meeting its declared objectives.

(Ahram Onine / 11 Jun 2016)
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Wednesday, 25 May 2016

DP World Raises $1.2 Billion From Sukuk to Fund Bond Buyback

DP World Ltd., the Dubai-owned company that operates ports from China to South America, raised $1.2 billion from the sale of Islamic bonds and said a tender offer to buy back securities received 48 percent more bids than the target.
The company sold a seven-year sukuk that will be priced to yield 237.5 basis points, or 2.375 percentage points, over the benchmark midswap rate, according to two people familiar with the deal, who asked not to be identified because the information is not public yet. The issue received more than $2.5 billion in bids, they said.
Money raised from the sale was meant to fund an offer to buy up to $750 million of DP World’s existing 2017 sukuk and for general corporate purposes, the company said earlier this month. The tender offer received $1.113 billion of valid certificates at its close on May 23 and DP World said it may buy all of them if it raises enough cash from the issue.
The offer for the 2017 securities was to pay $10,555 for every $10,000 of principal.
Bond sales from the six-nation Gulf Cooperation Council, which includes the two biggest Arab economies of Saudi Arabia and the United Arab Emirates, are accelerating as governments and companies seek funds following oil’s decline in the past two years. Offerings from the region have risen 28 percent to $16.7 billion, while Qatar’s government, Abu Dhabi’s Etihad Airways PJSC and its partners also plan to sell bonds this week. Dubai-based Noor Bank PJSC also raised $500 million from a perpetual sukuk today.

Citigroup Inc., Deutsche Bank AG, Dubai Islamic Bank PJSC, HSBC Holdings Plc, Barclays Plc, Emirates NBD Capital PJSC, First Gulf Bank PJSC, JPMorgan Chase & Co., National Bank of Abu Dhabi PJSC and Societe Generale SA are helping arrange DP World’s issue. Noor Bank, Samba Financial Group and Union National Bank PJSC have also been appointed co-arrangers.

(Bloomberg / 24 May 2016)
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Tuesday, 17 May 2016

Sukuk plays important infrastructure development role

Sukuk has played a significant role in promoting resilient infrastructure and sustainable economic development, and therefore should be boosted in the future, Finance Minister Bambang Brodjonegoro has said.
In his opening remarks at a seminar during the Islamic Development Bank ( IDB ) Group annual meeting at the Jakarta Convention Center ( JCC ) on Monday, Bambang said it was important for Islamic finance to contribute to the sustainable development goals ( SDGs ).
"Sukuk naturally controls the needs of financing, which are based on underlying assets. It also provides a protective mechanism and natural hedging, making the industry more sustainable," Bambang said.
He further said that sukuk had played a significant role in infrastructure financing. Aside from issuing sukuk for general financing, the government has issued sukuk to finance infrastructure projects, such as railways and toll roads.
"This kind of project financing assures the effectiveness of sukuk," he went on.
Bank Indonesia ( BI ) Governor Agus Martowardojo added that sukuk had been growing rapidly in the last few years. However, Islamic financing instruments must be developed.
Indonesia has been active in sukuk markets since it laid the groundwork for sukuk issuance in 2007. This year, Rp 110.9 trillion ( US$ 8.33 billion ) in sukuk was issued in the domestic and international markets, according to ministry data.

Sukuk made up 15 percent of total outstanding government securities as of April 29. It comprises six instruments across a wide range of tenors, sizes, coupons and investors. 
(The Jakarta Post / 16 May 2016)
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Islamic finance prepares rules for awqaf and zakat charitable funds

Islamic finance institutions will present a set of guidelines for Muslim charitable institutions later this month, as the industry looks to develop a more efficient use of their assets, an Indonesian central bank official told Reuters.
Islamic endowments (awqaf) and alms-giving (zakat) have been in existence for centuries and hold billions of dollars in assets around the globe, but they are often criticised for being poorly managed.
A set of guiding core principles for zakat has now been completed and will be unveiled at an upcoming United Nations summit in Istanbul, said Indonesian central bank deputy governor Perry Warjiyo.
Similar rules for awqaf are also in development, Warjiyo said on the sidelines of the annual meeting of the Islamic Development Bank Group being held in Jakarta.
Indonesia’s central bank is hosting some of the technical discussions for developing the core principles, as it hopes to strengthen the auditing function and professional management of such entities.
Reliable statistics are scarce, but awqaf are believed to hold large portfolios of real estate, commercial enterprises, cash, equities and other assets, with some estimates as high as $1 trillion worth of assets held globally.

In Indonesia alone, registered land from awqaf stands at 1,400 square kilometres with an estimated market value of around $60 billion, according to the country’s Ministry of Finance.
(Reuters / 16 May 2016)
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Monday, 16 May 2016

Bahrain Said to Raise $435 Million From Privately Placed Sukuk

Bahrain, whose junk rating was lowered by Moody’s Investors Service, tapped the dollar bond market for a second time in three months, according to two people familiar with the matter.
The Gulf nation appointed Noor Bank, Bank ABC and Kuwait Finance House to arrange a $435 million, privately placed Islamic offering, the people said, asking not to be identified because the information is private. The three-year debt will have a profit rate of 325 basis points over midswaps. Moody’s on Saturday reduced Bahrain’s long-term rating one notch to Ba2, two levels below investment grade.
The island state is attempting to shore up state finances pressured by low oil prices. Bahrain’s vulnerability to a decline in crude increased since 2009 when government expenditures started to rise in response to the global economic slowdown and civil unrest in the country. The sovereign last tapped the dollar bond market in February when it raised $600 million, a week after S&P Global Ratings cut the nation’s credit grade to junk.

Spokesmen for Bahrain’s central bank, Kuwait Finance House and Bank ABC didn’t immediately respond to calls or e-mails. No one at Noor Bank was immediately available for comment.

(Bloomberg / 15 May 2016)
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Gold may fuel Islamic finance

With the Islamic finance industry set to be worth US$3 trillion in the next decade, gold could be a catalyst for its growth with the setting of new regulations that will allow Islamic investors for access to gold-based products for the first time.
The market development body, the World Gold Council (WGC), which is based in London and the Islamic standard setting body, the Accounting and Auditing Organisation for Islamic Financial Institutions (Aaoifi), based in Bahrain, are working on a draft of the standard that would galvanise the $2n Islamic finance industry.
“Consumers more or less have been confined to investing in bars and coins because that’s the only area where the rules are clear," says Natalie Dempster, the WGC’s managing director of central banks and public policy.
“It [the standard] could fundamentally change the way in which Islamic countries access gold."
A final draft is expected to be published in the next few months, to be followed by a period of public consultation, says Ms Dempster. The standard could be issued in the fourth quarter, prompting its adoption and unleashing hundreds of tonnes of extra demand for gold, she adds.
“This is the most significant game-changer for the gold market since the Washington Agreement in 1999, whereby 15 central banks pledged to coordinate and limit their activities," says Matthew Keen, the founder of the Dubai consultancy Evidens. “The price of gold has quadrupled since that agreement was formed."
The Washington agreement limited the amount of gold that several major European central banks can collectively sell in any one year, helping to stabilise the gold market. The price of gold in 1999 was $290.25 an ounce. Now it is trading above $1,266 an ounce.
“I would expect billions of USD equivalent to be made available towards the global gold markets, keeping in mind that gold as an asset class has, anyway, a strong presence in a near zero interest rate environment," says Gerhard Schubert, the founder of Dubai’s Schubert Commodities Consultancy.
The fact that the Aaoifi is working on the standard will speed up its adoption worldwide because the regulations issued by the body are widely accepted, analysts say.
The divisive view of gold as a commodity or currency will also be clarified in the standard, which will take into consideration both aspects of the metal.
“Gold can only be bought and sold on spot/cash basis, there can be no deferred payment for any purchase of gold, and there are specific rules on the use of gold as a commodity or currency," says Megat Hizaini Hassan, the head of Islamic Finance Practice at Lee Hishammuddin Allen & Gledhill in Kuala Lumpur.
“Thus having a Sharia standard on gold would help contracting parties to know what specifically they can or cannot do with gold."
Gold has had a lustrous start to the year, rising by about 20 per cent year to date on the back of the low interest rate environment and flight of investments to a haven asset.
Gold’s rally this year follows three consecutive years of losses, its longest rout in more than 30 years.
Demand for gold rose in the fourth quarter of last year 4 per cent to 1,117.7 tonnes, led by central bank purchases, the WGC says. Central banks are buying the bullion to diversify their asset portfolios amid wobbly global economic growth and plunging commodity prices.
For the full year, gold demand fell 14 tonnes to 4,212.2 tonnes, a level on par with demand for 2010, the WGC adds.
Although Islamic investors have missed the gold train, the new standard will help them channel their money into products such ad gold exchange traded funds (ETFs), gold accumulation accounts and gold savings accounts, analysts and officials say.

ETFs are funds that are listed on an exchange, tracking indices and behaving like stocks.
“[The standard] makes it easier and more cost efficient for banks and financial institutions to issue gold products," says Ms Dempster.
“At the moment, if you want to invest in Sharia-compliant assets, the universe of assets that you have to choose from is actually quite small."
Currently most Islamic investors funnel their money into equities, property and sukuk or Islamic bonds.
“Although the price of gold can prove to be volatile in the short term, it’s always maintained its value over the long term," says Samina Akram, the managing director of London’s Samak Ethical Finance. “Investing in physical gold or mining stocks, I feel, will prove popular for investors in coming years. I would even argue further, values of currencies are declining as fiat money has no intrinsic value, and physical gold could be one of possible remedies to the global financial crises."
Gold could be used as an underlying asset for a number of products, including sukuk.
Islamic banks could also use gold as a high-quality liquid asset (hqlas) to comply with more stringent Basel III banking standards that are being phased in. High-quality liquid assets can be composed of cash, or assets that can be converted into cash at little or no loss of value in private markets to meet a bank’s liquidity needs.
“Since the financial crisis, banks have been required to set aside pockets of so-called high-quality liquid assets to protect them against another systemic liquidity crisis," says Ms Dempster.
“Basel gave national supervisors in Islamic jurisdictions the right to define high-quality liquid assets themselves. And I think gold will fit very well there. It is an extremely liquid market."
But the adoption of the standard could face a few bumps.
Banks should be willing to adopt the standard and dedicate time and effort to create products that investors want.
“The Islamic community will only be able to take advantage of this if the banks, both Islamic banks and regular banks, are prepared to deliver products to their clients, Islamic or otherwise," says Mr Keen.
“If the banks don’t do anything to take advantage of this, then nothing changes.
(The National Business / 15 May 2016)
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