Abu Dhabi Investment House unveils Islamic equity

Abu Dhabi Investment House (ADIH) launched Islamic equity and structured products aimed at offering rare opportunities to investors, ADIH in a statement said. In the statement the investment institution said: "Investors can participate in two new funds being launched by the firm in co-operation with its Geneva-based subsidiary." The initial offering period lasts from until July 31.

The minimum subscription amount is $100,000. ADIH Islamic Helvetic Fund-Global Islamic Equity, the new equity fund, will invest in shares of companies worldwide in accordance with the principles of Shari'a investment. The new fund's strategy aims at capital preservation while offering an appealing alternative to classical asset classes such as fixed-income and money-market investments: return objectives are set to 10 per cent per year net of fees with a volatility of 5 per cent.

Based on a multi-management approach which has been rarely available among Shari'a-compliant equity funds up to now, the fund will gradually allocate its assets between complementary investment strategies, combining sector and regional allocation as well as fundamental and quantitative models. The fund's launch is timed to exploit robust growth rates in emerging markets and possible recovery of the equity markets globally during the second half of 2008.

Stanlib launches Africa-focused Sharia equity fund

Dubai: Stanlib, the $45 billion Johannesburg-based asset management operation of the Standard Bank of South Africa, has launched an Africa-focused Sharia equity fund.
The fund currently on a road show in the Gulf countries is targeting to raise $250 million. The open-ended fund registered in Ireland will invest in Sharia-compliant equities from across Africa except South Africa.
"There is a large pool of Sharia-compliant assets in Africa. As Africa is one of the last frontiers of assets with low correlation to the Western markets, it provides great opportunities for Gulf investors," said Ashraf Mohammad, portfolio manager of the fund.
The new fund targets a return of 15 to 20 per cent and will not charge a performance fee. While it offers twice monthly repurchase option, the net asset value denominated in dollars is published every day. The Fund House said yesterday that although the net asset value will be published in the dollar, the funds underlying investments would be in equities denominated in various African currencies.

Atlas Asset to launch Islamic Income Fund

KARACHI: Atlas Asset Management Limited (AAML) will launch Atlas Islamic Income Fund (AIIF) soon. According to a company’s statement, AIIF will be AAML’s fourth open-end mutual fund and fifth overall.

It said, “the main objective of AIIF would be to offer investors Shariah compliant investment avenues, which would provide a consistent stream of income with long-term capital preservation.”

He said that the Fund would realise objectives by investing in Shariah compliant debt instruments of entities with minimum rating of A minus (A-). These debt instruments will include certificate of investments, bank deposits, placement of funds under Mudarabah, Musharikah and Murabahah Shariah-Compliant instruments, Sukuks and contracts, securities, issued by companies, organisations and establishments. staff report

Daiwa Asset Management To Launch Singapore’s First Shariah-Compliant ETF

Daiwa Asset Management (Singapore) Ltd. (Daiwa AM) and Singapore Exchange Limited (SGX) recently announced that Daiwa AM will launch Singapore’s first Shariah-compliant Exchange Traded Fund (ETF) on SGX. The Daiwa FTSE Shariah Japan 100 (DaiwaETF) will offer Islamic investors instant access to the top 100 Shariah-compliant companies in Japan by market capitalisation.

Shariah is the divine Islamic law that governs the practical aspects of a Muslim’s daily life. The DaiwaETF seeks to track the performance of the FTSE Shariah Japan 100 Index, which is designed to represent the return of the largest and most liquid listed companies in Japan that comply with Islamic legal principles.

Said Mr Michihito Higuchi, President & Chief Executive Officer of Daiwa Asset Management Co. Ltd, the parent company of Daiwa AM, “The DaiwaETF is the first Shariah-compliant ETF in Singapore and also our first ETF in Singapore. This ETF serves as an excellent proxy to the growth prospects of some of the best listed companies in Japan. Islamic investors can be assured that this ETF is in full compliance with the Shariah investment principles at all times as Yasaar Limited will be undertaking the Shariah screening at the fund level.”

Jadwa Offers African Investment Opportunities

RIYADH — The chairman of Jadwa Investment, Prince Faisal Bin Salman, hosted South African Ambassador John Davies and a number of businessmen at an “Investor Forum” for launching the new Jadwa Africa Equity Freestyle Fund. The fund is the first Shariah-compliant Africa fund offered by any institution in the region.

The offering of the Africa Fund places Jadwa in a leading position in the investment banking industry.

Remarkably, Jadwa has launched as many as 13 investment funds since June last year.

The comprehensive range of funds offered by Jadwa ranked it at No. 6 among the Saudi banks in terms of the assets under management, which exceeded SR5 billion.

“Jadwa, since its establishment in the first quarter of 2007, has made great achievements and Jadwa Africa Equity Freestyle Fund, the first of its kind, is a new milestone in its achievements,” Ahmed Al-Khateeb, managing director and CEO of Jadwa Investment, said in his welcome speech.

“Jadwa has set itself as a leader in Shariah-compliant investments in the world through its high quality services and superior investment solutions,” he added.

The ambassador was pleased with foresight and wisdom of Jadwa Investment in seeing the brighter side of African countries and with the introduction of the Jadwa Africa Equity Freestyle Fund.

Shariah-compliant commodity trading gathers pace in Dubai

Islamic Finance is not only dedicated to Islamic bonds (sukuk) or to funds investing in the stocks of firms which operate in a Shariah-compliant way.
It also has a prominent role to play in commodity trading. With the current boom in the commodity sector and in Islamic finance, financial institutions find themselves in a win-win-situation.
While Islamic Finance grows at an average of 20% p. a., according to Dr. David Rutledge, CEO of the Dubai Multi Commodity Centre (DMCC), the number of commodity managed funds has been growing at a compound annual rate of 98.2% in recent years.
Commodity receipt guarantees
With the Global Multi-Commodities Receipt (GMR) the DMCC offers owners of commodities a standardised system with which they can place their goods (such as gold, tea, wheat or crops) in a dedicated storage area.
By storing the goods, the owners receive a receipt, the Dubai Commodities Receipt (DCR) with which they can get a loan from a partner bank of the DMCC.
A potential purchaser who wants to acquire the assets can do so through one of the DMCC’s 16 member banks.
Since conventional loans are not permissible in Islam, Dubai-based HSBC Bank Middle East also offers the option of processing a commodity Murabaha-contract through its HSBC Amanah a long-standing player in the Islamic banking market.
Under Murabaha, the bank acquires the assets for a specific order by a customer. The bank pays for the commodities immediately at a spot price. Since interest is forbidden the financial institution then sells the entire load of goods at a deferred payment but at a higher price to the purchaser.
Reducing default risk
With the margin added to the spot price the purchase becomes permissible. The bank can reduce the default risk of the purchaser by demanding a down-payment or a letter of credit which proves the liquidity and good-standing of the customer. Murabaha is frequently used to synthesise money market transactions.
The advantage of the paperless, online-based GMR-system is 24/7-access from any place in the world. It is accessible to traders in Singapore, South Korea and Malaysia and will be soon expanding to Europe and the US.
In order to enhance Shariah-compliant commodity trading, the DMCC announced in March that it is currently setting up a separate entity called the Dubai Commodity Asset Management DCAM.
DCAM, established with an initial capital of $6.8m, entered in a joint-venture with DIFC-based Shariah Capital. The joint venture firm, Dubai Shariah Asset Management (DSAM), will be owned 51% by the DMCC and 49% by Shariah Capital.