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KFH-Research report about Islamic wealth management industry

Posted by Indian Muslim Observer | 22 February 2012 | Posted in , , , ,


  • Fortunes of the rich will reach USD 162 trillion in 2015
  • Astonishing growth in Islamic fortunes expected in light of increasing number of rich Muslims
  • USD 1.3 billion volume of Islamic assets by end of 2011

KFH-Research prepared a report about Islamic wealth management industry around the world. It stated that this industry has great growth potentials during the coming years, in light of the growing number of rich Muslims, constant growth of Islamic assets, and the increasing demand for Shariah compliant services and products in Islamic and non-Islamic countries. It revealed that the volume of Islamic assets reached USD 1.3 billion by the end of last year.


In addition, the report mentioned that the global wealth management sector is expected to grow with an annual average up to 6% from 2012-2015 to reach USD 162 trillion, despite expected slowdown in global economy.


The following is the report:


Islamic Wealth Management Industry


Islamic assets have grown at an average rate of 15%-20% per annum over the past decade to reach approximately USD1.3tln in 2011. The main driver behind the development and growth of the Islamic finance industry is the growing demand and preference for Shariah-compliant financial products, backed by rising wealth and excess liquidity arising from the high oil prices over the years. Since the 1970s, when GCC oil companies were nationalised and oil prices surged, the region's GDP as well as individual fortunes have grown significantly. Indeed, the Islamic wealth management industry remains one of the fastest growing sectors in the Middle East and sparked high interest outside the region.


In recent years, a genuine interest in Shariah-compliant products and services among the country's Muslim and non-Muslim communities alike has caused market forces to take over and steer the growth. We see tremendous growth potential in the Islamic wealth management industry, driven mainly by the increasing population of high Islamic high net worth individuals (HNWIs) as well as improvement in investors' confidence on the back of commendable economic growth in emerging countries.


According to market estimates, global wealth increased by 8% y-o-y to USD121.8tln in 2010, underpinned mainly by strong growth rates in emerging economies, high commodity prices, recovery in the real estate markets, and high oil prices. Although the growth pace in wealth has slowed post global financial crisis, compared to the average growth pace of 11% achieved between 2002 and 2007, the outlook continues to remain positive, with strong wealth growth drivers in the emerging markets of Asia, the Middle East and Latin America.


Global wealth is projected to grow by approximately 6% annually between 2011 and 2015 to reach USD161.9tln, characterised by the following factors:


* Positive performance of capital markets, strong GDP growth especially in emerging markets and increased savings worldwide post crisis.


* North America is expected to remain the largest wealth market, with total wealth growing at an average rate of 6.9% annually to reach USD48.8tln in 2015, representing 30.1% of global wealth.


* Europe is expected to be the second largest wealth market, with total wealth growing at an average rate of 5.7% annually to reach USD45.6tln in 2015, accounting for 28.2% of global wealth.


* Asia's total wealth (excluding Japan) is projected to grow at the fastest pace, averaging at 18% per annum to reach USD37.3tln in 2015. As such, Asia's total wealth will account for approximately 23% of global wealth in 2015 (2010: 17.8%).


* Total wealth of emerging markets of Asia (excluding Japan), MENA and Latin America combined is projected to reach USD49.4tln in 2015, representing an average growth rate of 16.6% per annum. Total wealth from these regions will account for approximately 30.5% of global wealth in 2015 (2010: 24.4%), outstripping North America's 30.1% and Europe's 28.2%.


Islamic assets


Islamic banks, takaful companies, Islamic investment banks as well as Islamic private equity companies act as an intermediary to channel surplus money into the financial market system. The Banker Top 500 Islamic Institutions reported that the GCC's full-fledged Islamic banks contributed 42.1% of total global Islamic banking assets in 2011, followed by Iran (35.7%), and Malaysia (12.3%). The Islamic banking industry is not only confined to Muslim-majority countries such as the GCC and Malaysia, but also into new territories such as the Far East and Europe, many of which are currently in the midst of implementing appropriate regulatory and legal reforms that would facilitate the provision of Islamic financial products. Customer base comprises both Muslims and non-Muslims while players include domestic as well as international conventional banks.


Over the years, the Islamic financial institutions have started to tap new growth opportunities in other regions and form cross-border linkages. The range of Shariah-compliant products and services has also grown, underpinned by an increased knowledge and awareness of Islamic finance principles. The depth and breadth of Islamic finance products have increased from basic savings account to more sophisticated instruments on the capital market such as sukuk or Islamic bonds and Islamic real estate investment trusts.


Sukuk forms a significant component of the Islamic capital markets, second only to equity. Over the past decade, the sukuk market has grown to reach USD178.2bln outstanding to contribute 14.3% of the total global Islamic finance assets at the end-2011. 2011 witnessed primary market issuances grow by 88.4% y-o-y to USD85.1bln. During the period, the South-East Asia region dominated issuances, accounting for 76.9% while issuances in the GCC region accounted for 22.1% and other jurisdictions the remaining 1%. Prospects for the sukuk industry remain bright, underpinned mainly by sovereign issuers and their support for the market, which issued USD58.9bln or 69.3% of all sukuk during 2011, strong economic growth and development in the emerging markets, the continued spending on infrastructure and the project-based financing requirements in Asia and the Middle East.


The Islamic funds industry has grown sharply over the past decade thanks to the growing number of institutions structuring products as Shariah-compliant alternative investments. The industry took off in 2007 along with many other areas of the asset management world. Unfortunately, it followed suite when asset prices retreated after the global financial crisis and global markets faced a sharp correction. Nevertheless, total Islamic funds' assets grew to USD40.9bln in 2011, achieving a 7.4% growth during the period. Similarly, the number of funds grew to 715 at the end of 2011, up 3.9% from the 688 funds in 2010.


2012 looks set to be a difficult year for Islamic funds given the continued struggles in the Eurozone, as well as in other developed nations which are facing the prospects of another recession. Shariah-compliant equity, which made up 56.3% of Islamic funds' asset allocation in 2011, will be crucial to fund performance and will be looking to rebound after ending 2011 negatively.


Outlook


There is likely to be a bigger migration to Islamic financial services in certain markets due to the loss of faith in the conventional system arising from the global economic and financial crisis. As market conditions continued to improve, expect investors to increasingly look for Shariah-compliant investment opportunities which are more transparent and ethically structured.


Attention has been increasingly drawn to the Islamic microfinance segment as a means to eradicate poverty in countries with large Muslim populations. In this regard, Islamic microfinance could serve as a possible investment to investors who are looking for an asset class that offers both positive social implication as well as reasonable returns to the investors. Islamic microfinance is indeed unique, as it is a mixture of economic, social and religious principles:


• Economic. The elimination of interest rate or riba and other unlawful transactions help to avert harmful consequences to the society and economy.


• Social. The profit and loss sharing contract promotes participation, equality, trust and brotherhood.


• Religious. The practice of benevolent finance is an implementation of worship and moral responsibility of human beings.


Moving forward, we see tremendous growth potential in the Islamic wealth management industry, driven mainly by the increasing population HNWI as well as improvement in investors' confidence on the back of commendable economic growth in emerging countries. The International Monetary Fund (IMF) expects global growth to expand by 3.3% in 2012. Although advanced economies are expected to struggle to grow, growth in emerging and developing Asia is expected to expand albeit at a slower pace, with China's GDP to grow by 8.2% in 2012 (2011E: 9.2%) and India's growth is forecast to slow to 7% from 7.4% in 2011.


Meanwhile, the economic outlook remains robust for the GCC supported by high revenue from the hydro-carbon sector and higher public spending. Crude oil is expected to average at USD100 per barrel in 2012 vs. USD98.8 per barrel in 2011. Non-oil GDP growth in the GCC is also expected to remain healthy following additional fiscal spending and implementation of measures to promote economic diversification. Nevertheless, real GDP growth for the GCC is projected to ease from 6% expected in 2011 to 5% in 2012, taking into consideration the downside risks from the likelihood of volatility in oil prices, high inflation induced by massive government spending and slowdown in the global economic activities.


Other factors that will support growth of the Islamic wealth management industry include the following:


• Strong demand for Shariah-compliant products and investments.


• Proactive measures taken by governments and jurisdictions worldwide to promote the development of Islamic finance in their respective countries.


• Government-linked/ top tier companies in the Middle East and emerging Asia (financial, real estate, oil & gas and transport sectors) are looking for funds on the back of massive infrastructure and construction projects in the regions.


• Encouraging demographics. By 2020, the total Muslim population would have increased to an estimated 2.5 billion from 1.5 billion currently. Currently, Asia Pacific region has the highest Muslim population totalling 1 billion or 62.1% of total Muslim population.


In terms of investment preference, in the next few years, HNWIs are expected to increase allocations to riskier assets such as equities and real estate, in line with improved investment sentiments and especially if the global economy shows clear signs of a sustained recovery.
Key risks to the outlook include a slowdown in the world economy and contagion effects arising from the European sovereign debt problems.


(Courtesy: Zawya.com)

ISLAMIC WEALTH MANAGEMENT: Health, Wealth & Happiness

Posted by Indian Muslim Observer | 17 February 2012 | Posted in , , , ,

By Paul McNamara


The area of Islamic wealth management has always been a neglected one in large part because it is believed that there is no real practical demand for it. Ultra-wealthy Muslims seem to park their excess funds in a string of investment vehicles that provide the best returns rather than those that are Shari’ah compliant.


Perhaps more pertinently it’s very hard for any Islamic wealth manager to match the kinds of levels of service and excellence that a bank like Citi can offer – since it has access to just about every financial product on the planet, from basic real estate plays through hedge funds to absolute returns products. Very few Islamic wealth managers can hope to compete with this level of offering and so few try.


But lately there has been a rising tide of Gulf-based banks upping their Shari’ah compliant wealth management offering in the hope of securing at least a portion of the ultra-wealthy Muslim investable funds market. They are not naïve enough to think that they will capture all of it, but with hundreds of billions of dollars in play even a 10% or 20% slice can be very attractive indeed.
The latest green shoots of Islamic wealth management are largely restricted to the Gulf markets because the ultra-wealthy in the other significant Islamic finance market, Malaysia, are generally Chinese rather than Muslim. It is a subject that the authorities in Malaysia are not keen to talk about for fear of stoking ethnic unrest but the rich in Malaysia are undoubtedly Chinese – and the mega-wealthy Chinese are very happy to have Singapore on their doorstep as, arguably, the fastest rising wealth management center in the world.


Singapore, simply put, is a financial center par excellence that has cleverly positioned itself as the wealth management center of choice – bearing in mind the phenomenal rise of China as the next major superpower. That it also has a modest Islamic wealth management offering is no surprise – but Singapore’s eyes are on wealthy Gulf Arabs rather than neighboring bumiputra Malays.


The traditional wealth management center of the globe, Switzerland, is almost bereft of Islamic wealth managers, preferring instead to focus on the traditional wealth management markets while fighting off intrusive American-led probes into its banking secrecy regime.


UBS makes an interesting case study of how a market can be eroded by the constant drip, drip of American pressure. While Swiss wealth managers have traditionally taken a low-key approach to branding and awareness, perhaps the only Islamic private bank in Switzerland, Faisal Private Bank, takes the low-key approach to such extremes that it is all but invisible to the outside world. Indeed the bank appears to have gone into hibernation and has neglected to produce an annual report since 2009.


All of this leaves the field pretty clear for players like ADIB, which is developing a fuller palette of Islamic wealth management instruments in hometown Abu Dhabi. Neighboring Dubai Islamic Bank launched its Wajaha wealth management product as long ago as 2009. Noor Islamic Bank, meanwhile, has launched Infinity that it says is for its ‘high net worth clients catering for all money matters throughout all phases of life, from wealth management, creation, preservation, financing and lifestyle.’


Over in KSA NCB Capital is the first subsidiary of a Saudi bank to be licensed by the Capital Market Authority to handle investment banking and asset management in the kingdom to provide clients with solutions of integrated investment services. Also in Saudi Al Rajhi Capital is one of the largest fund managers in the Kingdom and provides its clients with a range of quality investment products and services, but it is in areas like discretionary portfolio management where the Saudi banks really come into their own.


Indeed a look around all of the GCC markets, barring Oman, will show that there has been a significant increase in Islamic wealth management offerings over the past 12 months. In an ideal world it would be useful to be able to distinguish which bank had the best Islamic wealth management offering, but sadly the waters are muddied rather with the proliferation of spurious awards for ‘best Islamic wealth manager’ given on a favors-basis rather than a merit-basis.
What remains true is that the quality of offering by Islamic wealth managers and private banks is increasing and while Islamic banks will never steal more than a fraction of the business away from the private banking behemoths like Citi, the fraction that they do steal is likely to be very lucrative, high-margin stuff.


(Courtesy: The Islamic Globe)

Crescent Wealth launches Australia's first Islamic investment option

Posted by Indian Muslim Observer | 10 October 2011 | Posted in , , ,

Crescent Wealth, Australia’s first Islamic wealth manager, today announced the launch of the nation’s first Islamic Australian equity fund as the firm pioneers a dynamic new opportunity in the superannuation industry, and taps the potential for Australians to access the $1.4 trillion global Islamic financial services market.

The Crescent Australian Equity Fund (CAEF), which launches today (October 6, 2011) with an initial $5.5 million in funds under management and advice, offers all Australians an investment that is managed in accordance with Islamic principles, and is aimed at investors who are seeking a socially responsible alternative option. Crescent Wealth is planning to launch a further three funds - international equities, property, and income funds - which together will form Australia’s first Islamic superannuation option.

Crescent Wealth, currently the only local manager with specialist expertise in Islamic investing, is targeting the significant potential for Islamic funds in Australia, which it estimates will grow to as much as $13 billion in funds under management by 2019 from a potential investable universe of as much as $8 billion today.

A local Islamic investment option has received strong support from the wealth management industry and the Government as Australia seeks to boost its credentials as financial services hub in the Asia-Pacific region. Crescent Wealth sees significant potential for job creation in Australia by accessing the enormous potential of the global Islamic finance industry. Some 62% of the world’s Muslims are in the Asia-Pacific, the single largest community.

Aon Hewitt, which helped seed the CAEF with an initial investment, sees Crescent Wealth as an important innovator in the wealth management industry, and the only Australian manager with the specialist expertise to succeed as a pioneer in Islamic investing.

"I would like to thank Aon Hewitt for their far-sighted vision, innovation and ability to actually commit and implement," said Talal Yassine OAM, Crescent Wealth’s founder and Managing Director.

"For the first time, Australians have access to a local wealth manager with a specialist focus and expertise in Islamic funds, and whose products are targeting a significant gap in the Australian investment landscape. We are also selling Australia to the world by pioneering access to one of the most significant emerging market opportunities in the global investment industry today.

"There is enormous potential for Islamic funds, from the Australian community and from abroad, mirroring the significant growth that we have seen in similar funds overseas. Crescent Wealth is proud to be the leading Australian pioneer in Islamic investing, and we are very pleased to offer an innovative new product that's specifically tailored to meet one of the most exciting growth opportunities in the wealth management industry," Mr Yassine said.

The Aon Master Trust, a $2 billion superannuation fund, has long provided an "Australian Shares - Socially Responsible" option for Australians who want their super savings invested in an ethical manner, eschewing industries such as gambling and tobacco. From July 2011 this ethical option invested in the CAEF to provide greater potential for strong risk-adjusted return.

Pierre Kraft, Aon Hewitt's Managing Director Wealth Management, said: "Many Australians, who are uneasy about having their super exposed to highly leveraged companies or funding activities such as gambling, now have access to an easily accessible superannuation solution. The ethical screens are very similar to what we have had historically and we believe they will continue to appeal to many Australians."

The Crescent Australian Equity Fund will formally be launched at a function for about 150 guests, hosted by Norton Rose in Sydney tonight. Guest speakers include The Hon. Chris Bowen MP, Federal Minister for Immigration and Citizenship, and John Brogden, CEO of the Financial Services Council. The function is attended by Michael Tooma, Partner at Norton Rose; Janice Sengupta, Chief Investment Officer at Aon Hewitt; and Andrea Forbes, Advisor to the Assistant Treasurer and Minister for Financial Services and Superannuation.

Financial Services Council CEO John Brogden welcomed the launch of Australia's first locally-based fund manager with a specialist focus on Islamic investing.

"Islamic finance has been talked about for some time and the Johnson Review of Australia as a Financial Services Centre recognised its potential. I expect today's launch is the beginning of a new growth opportunity for the Australian wealth management industry," Mr Brogden said.

Crescent Wealth is promoting the Australian financial services industry to the Islamic investment world. It is offering a safe, stable and transparent window into Asia, which contains the world's largest Islamic market by population. The creation of Crescent Wealth highlights the potential for the Australian economy as it accesses even a small proportion of the global Islamic investment market.

Media Facts

The potential for Islamic funds

Islamic banking assets total more than US$1 trillion globally, of which Islamic equity funds comprise about US$50 billion, according to Ernst & Young Islamic Funds & Investments

Report 2010. The addressable global universe for Islamic fund managers is in excess of US$500 billion, growing by 10-15% annually. In 2010, global assets under management grew by 7.6% to US$58 billion.

Crescent Wealth estimates the investable universe for Islamic funds in Australia is currently worth $4 - 8 billion, with potential to grow to $7 - 13 billion by 2019. Crescent Wealth is targeting FUM of $100 million in 2012, increasing to $2 billion by 2016.

The Australian government is looking at ways to support the Islamic finance industry as part of its drive to make Australia a financial services hub for Asia.

What is Islamic investing?

The Crescent Australian Equity Fund is advised by a Shariah Supervisory Board (SSB) comprising world-leading scholars in Islamic finance. Islamic finance differs substantially from conventional finance, and comprises four core principles:

Payment and receipt of interest: The prohibition of interest arises from the Islamic view that money should be used only as a medium of exchange, a store of value, and a unit of measurement. Money itself possesses no intrinsic value. The charging or receipt of interest - or riba' - is therefore prohibited. Any return on money invested should be linked to the profits of an enterprise.

Uncertainty: The existence of uncertainty - or 'gharar' - in a contract is prohibited. Everyone participating in a financial transaction must be adequately informed and all fundamental terms such as price or quantity must be clearly defined at the outset.

Speculation: Investments that rely on chance or speculation, rather than the efforts of the investor, to produce a return are prohibited. Normal commercial risk-taking and related speculation is otherwise permitted.

Social and moral values: Similar to socially responsible investing, Islamic investment filters out socially detrimental activities, such as gambling, pornography, alcohol and weapons. For the most part, Islamic investing is consistent with conventional value-based investing, which mandates social values and good governance.

Through its Board of Islamic scholars, Crescent Wealth applies a number of qualitative screening filters to ensure all investments held in the fund are in accordance with Islamic principles. Industries that are avoided include: alcohol, tobacco, weapons, pork, financial services, gambling, pornography, leisure & media.

The CAEF is weighted to resources and mining equities, and some small cap stocks. Investments, for example, include BHP Billiton, Rio Tinto and United Group.

Crescent Wealth

Founded in 2007, Crescent Wealth is the first (and currently the only) Australian wealth manager with a specialist focus on Islamic investing.

Founded in 2007, Crescent Wealth has been granted an Australian Financial Services Licence (AFSL) by ASIC.

We partner with some of Australia‟ leading organisations, including Aon Hewitt, Sigma Funds Management, Ernst & Young, J.P.Morgan, Norton Rose and Thomson Reuters.

The role of Crescent Wealth is to manage all aspects of its funds under its ASIC licence, including product development, registration, legal, accounting, auditing, marketing and distribution. The CAEF is sub-advised by Sigma Funds Management.

Crescent Wealth founders, Talal Yassine OAM, Samier Dandan and Issam Eid, bring a track record of successful entrepreneurship and significant funds management, legal and investment banking experience.

Crescent Wealth is already the leading pioneer in Islamic investing in Australia, and aspires to grow its position as the leading provider of Islamic funds. It also aspires to grow by offering all Australians a genuine alternative to more traditional investments.

Target market comprises Muslim community organisations, high-net-worth individuals, professionals, and institutional investors in Australia and, eventually, overseas.

Our four planned Islamic funds (Australian Equity Fund, International Equity Fund, Diversified Property Fund and Income Fund) are open to both private and institutional investors. They will form the platform for our unique superannuation offering, where we see significant potential for growth.

Crescent Australian Equity Fund (CAEF)

The Crescent Australian Equity Fund is Australia's first licensed Islamic managed fund. It is open to all investors, including private and institutional. It has a bias towards resource, mining and small cap equities from an investable universe of about 200 stocks. The fund is sub-advised by Sigma Funds Management in Sydney, a highly experienced Australian equity manager that is rated by Van Eyk.

Target size: $500m
Target return: 6.79%
Management fee: 1.79%
Minimum investment: $10,000
Investment horizon: 3 and 5 years

(Courtesy: Zawya)

Islamic fund assets grew 7.6% last year

Posted by Indian Muslim Observer | 27 September 2011 | Posted in ,

Market performance and inflows spur growth

By Babu Das Augustine

Dubai: Islamic fund assets under management (AuM) grew by 7.6 per cent to $58 billion (Dh213 billion) in 2010, up from $53.9 billion in 2009, according to the fifth annual Ernst & Young Islamic Funds and Investments Report (IFIR 2011) released yesterday.

The growth was largely due to market performance and partially on account of new money inflows. Assets under management are largely dominated by equities — about 39 per cent.

Fixed income, commodities and alternatives also did well in 2010, which was a record year for sukuk with an issuance of $50 billion.

In the GCC, Ernst & Young expects the liquid wealth of Sharia-sensitive investors to add more than $70 billion to Islamic funds by 2013.

"Growth in 2010 is welcome given the industry's flat performance since 2007. Looking ahead, the challenging times are by no means over," said Ashar Nazim, Mena head of Ernst & Young's Islamic Finance Services.

Despite the market challenges, 23 new Islamic funds were launched in 2010 while 46 were liquidated.

The Islamic funds' universe comprises some 100 fund managers and 800 Islamic funds, but represents only 5.6 per cent of the $1 trillion Islamic financial services industry. Apart from identifying the trends in the Islamic fund management industry, IFIR identifies three key priorities for the industry.

While fund managers are faced with limited availability of quality Sharia compliant assets and fewer products to invest in, the report calls for an improvement to levels of investor and industry trust in their brand and track record.

The report calls on the industry to widen its reach of various sources of funds such as institutional and affluent client fund flows.

Access to affluent investors and institutional clients like Waqf (Islamic endowments), family businesses and takaful operators is central to future growth.

"Over-dependence on a few institutional funds that made up two-thirds of the total new funds launched in 2010 is a key structural weakness in Islamic markets in all regions except Malaysia," the report said.

"Institutional funds make up 67 per cent of global Islamic funds' AuM while retail funds make up 33 per cent."

Sharia-compliant philanthropy, or planned giving, is on the rise with the Waqf sector estimated at around $105 billion globally, according to recent research conducted by Ernst & Young on the sector.

"The Sharia-compliant endowment sector provides a unique impetus for the growth of Islamic finance including the asset management industry," Nazim said.

"While Waqf has always been an integral part of Islamic countries' economic system, it is only now that a more formal structure is evolving for professional investment management of this pool of money."

A significant majority of the Waqf assets are in the form of real estate, and could be as high as 70-80 per cent of total sector assets.

"The remaining money is deployed in Sharia compliant money markets mostly with regional financial institutions. Between Awqaf institutions [organisations that manage Waqf assets] and other entities, the cash Waqf alone is estimated at $35 billion," he said.

(Courtesy: Gulf News)

Higher penetration of Islamic assets seen in emerging markets

Posted by Indian Muslim Observer | 25 September 2011 | Posted in , , , , ,

By Chito Santiago

Islamic finance has grown significantly in the past few years and could become the largest segment in a number of banking systems in the Middle East by 2020 with a penetration rate in excess of 50 percent of the local banking assets. In Malaysia and Bangladesh, it would be close to 50 percent, based on a research by HSBC Amanah using historical compound annual rate of growth.

Yakub Bobat, global head of HSBC Amanah Commercial Banking, on September 20 told a Sibos conference being held in Toronto, Canada that at the end of 2010, the penetration rate of Islamic assets in Saudi Arabia and Kuwait was more than 30 percent, Malaysia 22 percent, and United Arab Emirates and Bangladesh 18 percent. “Islamic finance is fast becoming an important proposition in certain distinct emerging markets in Asia and the Middle East,” he says.

Bobat reiterates that Islamic finance has performed relatively well amid the global financial crisis in 2008 with its built-in immunity from toxic assets, although he notes that it is not safe from exposure to the credit market and the real economy.

Looking at the key trends and opportunities within the industry, Bobat highlights the significantly growing Muslim population, which is estimated to reach 2.2 billion by 2030, or 26 percent of the world population. He says there is increasing propensity towards core value in Islamic products and will result in significant amount of investment in infrastructure across Asia-Pacific.

Afaq Khan
Afaq Khan, CEO of Standard Chartered Saadiq, notes the increasing interest by the sovereign wealth funds to invest in Islamic assets, which is fuelling the moves in South Korea, Australia and France to come up with laws, rules and regulations to allow Islamic finance to co-exist in these geographies so that capital can flow efficiently across borders.

He says: “It is a win-win situation for everybody because the Islamic finance industry needs diversification. They want to be part of growth economies. At the same time, they offer access to a large pool of capital.”

To push the Islamic finance industry going forward, Bobat cites the needs to drive innovation and to focus more in building risk-sharing products and in the development of sukuk funds and sukuk project finance.

As the industry’s building blocks, Bobat says Islamic finance needs to support investment in the real economy such as infrastructure development and to build cross-border reach. “The industry today is pretty much local and fragmented, and regional at best,” he notes. “We need local players that are able to build and bridge the cross-border connectivity, so consolidation could be a theme in the years ahead. We need to continue to build standardization across different industry planks and continue to build institutional architecture, such as liquidity management.”

(Courtesy: The Asset)

Bankers to speak on Islamic Wealth Management

Posted by Indian Muslim Observer | 09 July 2011 | Posted in , ,

Michael Gassner Consultancy of Cologne, Germany, will host Genevas first private banking seminar for bankers on Islamic Wealth Management for two days, June 8 & 9, at the Mandarin Hotel du Rhone.

The seminar is meant to update and educate bankers in Geneva on the growing trend among Muslim communities everywhere to adapt their banking needs to Islamic principles. There is a very wide perceived gap between general education and experience in Islamic banking among Geneva bankers, but evidently a very sizeable amount of business from Muslim clients is held in custody or actively managed in banks in Switzerland. Some banking professionals guess the funds from Muslim clients in Geneva alone amount to $100 billion or more, yet very little of it today is actively managed according to Islamic principles.

Islamic finance is the fastest-growing sector of the worlds entire financial industry. Growth rates of 15 % are frequently cited, with new Islamic banks set up almost each month. The volume of assets in Islamic financial institutions should reach $270 billion worldwide, with a similar amount managed by conventional banks according Islamic sharia investment criteria.

Seminar Topics & Speakers

Wealth management is at the heart of Islamic finance, and Geneva is the worlds capital of wealth management. The Islamic Wealth Seminar will explore underlying principles of Islamic finance, discuss the needs for Islamic certification of investment products, identify market trends for various Muslim communities, and will review what is available today for Muslim investors among different asset classes. The seminars topics and speakers are:

Development & distribution of sharia-compliant products, Dr. Humayon Dar, Vice President, Dar Al Istithmar Ltd., London

Islamic markets and clients of Islamic banking, John A. Sandwick, Managing Director, Encore Management S.A., Geneva

Islamic stock funds and real estate funds, Tariq Al Rifai, Failaka, Chicago, United States

Tax & inheritance management for Muslim clients, Trevor Norman, Volaw Trust & Corporate Services Ltd., Jersey

Islamic finance for investors in real estate, Jan Duhrkoop, IVG AG, Bonn, Germany

The event is organised by Michael Gassner Consultancy, a German firm specialised in Islamic finance; advising primarily financial institutions on structures, distribution and marketing of Islamic products. Michael Gassner is founding editor of the industry's bulletin IslamicFinance.de -Executive News, which is available monthly free of charge on the companys website.

Silver sponsors of the seminar include Dar Al Istithmar of London and IVG Immobilien, the listed German real estate real estate firm. Encore Management S.A., a Geneva independent asset manager, is a gold sponsor of the seminar.

(Courtesy: Pcorlap Top)

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