HSBC Amanah plans new Islamic funds

Published: Thursday, 14 February, 2008, 02:29 AM Doha Time
Business Reporter

DOHA: HSBC Amanah, the global Islamic financial services arm of the HSBC Group, is developing new funds, including Islamic structured notes in view of the growing needs for Islamic investments.

The GCC region, which holds a promising investment outlook, is all set to see new instruments like exchange traded funds and new asset classes, especially the Halal industry, according to experts who spoke at the recently held seminar on Wealth Management, organised by HSBC Amanah, which has assets worth more than $6bn.

"There is a growing need for Islamic investment products in our core markets. We are developing HSBC Amanah structured notes," its Regional Head of Wealth Management Ishrat Kiyani said.

He said HSBC Amanah was currently developing new funds such as HSBC Global Emerging Market Fund and HSBC Amanah Hangseng Index Fund for capturing the growth in emerging markets and Asia Pacific.

"Out goal is to offer our clients attractive investment opportunities and the assurance of Shariah authenticity," he said.
On the investment outlook for the GCC, Shuaa Asset Management Chief Investment Officer Amin El-Kholy said it was promising.
"The recent strong growth has been structural and sustainable due mainly to increased consumer spending, economy diversification, structural reforms and sustained high oil prices," he said.

The stock market price/earnings multiple for GCC was more attractive for investors compared with the expected GDP growth, he said.
"Equally interesting, GCC equity market is uncorrelated with S&P 500, which provides investors with unique diversification benefits and protects them from global downturns," he added.

Rushdi Siddiqui, Global Director of Dow Jones Islamic Market Index Group said new instruments such as Islamic exchange traded funds were gaining grounds, allowing investors to diversify investment opportunities and benefit from an interim alternative for short-term Islamic liquidity.
"The trend in Islamic finance is towards new asset classes and going forward, I see the Halal industry, including food, finance, medicine and cosmetics as very promising asset class for investors," he said.

Mohamed Ali Elgari, a Professor at King Abdul Aziz University in Riyadh and a member of HSBC Amanah Shariah Committee, said wealth creation was at the heart of Islam's economic philosophy.

"Growing one's wealth in line with the tenets of Islam is not only permissible but desirable", he said, adding Islam has a much wider vision for investments.