Islamic Finance in the Land of Pope

Gulf ties could aid Islamic finance in Italy, supporters hope

BY BERNARDO VIZCAINO Available at: http://www.reuters.com/article/2014/02/18/islamic-finance-italy-idUSL6N0JX0QS20140218

Feb 18 (Reuters) – Bankers and academics in Italy are stepping up efforts to develop Islamic finance in the country, a campaign which could benefit from growing economic links between Gulf countries and the euro zone’s third largest economy.

Islamic finance has so far made only marginal progress in continental Europe, mainly in France and Germany. But Italy is seeking trade and investment with wealthy Gulf Arab states as a way to grow out of its debt problems.

Kuwait’s sovereign wealth fund announced this month that it would invest 500 million euros ($685 million) in Italian companies in coordination with the Italian government’s own strategic investment fund. Italy made a similar deal with Qatar last year.

Italy’s trade ties with the Gulf are booming; its exports to the United Arab Emirates hit 5.5 billion euros in 2012, a 16.7 percent rise from 2011, government data shows.

Only about 2 percent of Italy’s population of 61 million are Muslim. But the hope is that as Gulf companies and investors increase their activities in Italy, Islamic finance – which follows religious principles such as bans on interest payments and pure monetary speculation – will follow.

Italian firms raising loans could use Islamic structures to attract sharia-compliant banks from the Gulf, for example. Italian bonds and equities could become attractive to Islamic funds if they were certified as sharia-compliant.

“I think the development of sharia-compliant products is an important opportunity for Italy – it might become one of the drivers to get finally out of the economic crisis,” said Enrico Giustiniani, analyst at Banca Finnat Euramerica in Rome.

“There is quite a big interest from Islamic funds and Islamic institutional investors to invest in Italy, especially in this period with many companies on sale.”

INDEX

Banca Finnat has gone as far as designing a hypothetical index of sharia-compliant stocks, which features some of the country’s best-known luxury brands, Giustiniani said.

“A specific index still does not exist, but the interest is very high. The luxury sector is a brand required by foreign institutional investors and it is a very important growth driver for our country.”

Gulf investors have already shown considerable interest in Italy’s luxury good firms; in 2012, for example, Italian fashion brand Valentino was bought by Qatar’s royal family.

Fondazione Istud, a Milan-based business school, plans to establish an Islamic finance position this year, intended as a venue for industry research and to develop proposals aimed at Italian decision makers.

This would be the first structured attempt to provide industry information and influence legislation, Marella Caramazza, director-general of Fondazione Istud, told Reuters.

“Certainly regulators and practitioners seem to demonstrate a general interest on this subject in our nation, but at the same time tend to have a very conservative approach.

“At this stage, we are trying to involve stakeholders and gather funds at different levels, in order to begin with the activities,” Caramazza added.

REGULATIONS

These activities should include a review of existing regulations, mainly those covering real estate registration taxes, said Hatem Abou Said, representative in Italy of Bahrain’s Al Baraka Banking Group (ABG).

Tax rules are particularly important for Islamic finance because many of its asset-based transactions are vulnerable to double taxation under conventional accounting methods; addressing such barriers could lure Islamic banks to the market.

Currently, however, only broad discussions are taking place with Italian policy makers and no specific agenda is in place, said Francesca Brigandi, president of COMEDIT, the Italian-Mediterranean and Gulf Countries Chamber of Commerce.

While political and legislative hurdles remain, Italy’s central bank is no stranger to Islamic finance as it monitors the sector on a regular basis, though it does not have a specific group studying Islamic finance, said a central bank spokesman.

Its research department has conducted formal studies, held seminars on Islamic finance as far back as 2009, and last year co-hosted a forum with the Malaysian-based Islamic Financial Services Board, one of the industry’s standard setting bodies.

Rony Hamaui, chief executive of Milan-based Mediofactoring, a fully owned subsidiary of Intesa Sanpaolo, Italy’s biggest retail bank, said his and other Italian companies had explored Islamic financing options in the past but did not do deals, partly because of a lack of regulatory support in Italy.

However, deals could start to materialise – perhaps involving Italian firms overseas – even without government support, as companies increasingly seek to broaden their funding sources, Hamaui said. “Liquidity is becoming a more and more important problem in Europe.” (Editing by Andrew Torchia)

Regards
P1050927
Duomo, Milan, Italy

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MEMAHAMI KONSEP “SUMPAH” DALAM ISLAM

MEMAHAMI KONSEP “SUMPAH” DALAM ISLAM

Oleh Zulkifli Hasan

1.0 Pendahuluan

Mutakhir ini, masyarakat dihidangkan dengan pelbagai isu agama yang sememangnya perlu difahami secara ilmiah, jujur, ikhlas dan tepat menurut kehendak syarak. Di antara isu yang menjadi topik hangat perbincangan umum pada hari ini ialah tentang konsep sumpah atau al-Yamin di dalam Islam. Apabila berlakunya sesuatu kes yang melibatkan pertuduhan dan perselisihan, maka kerap kali sumpah menjadi sebutan dan mainan. Di dalam kes pertuduhan liwat misalnya, ramai yang membuat andaian bahawa Yang Menuduh dan Orang Kena Tuduh perlu mengangkat sumpah bagi menyelesaikan kes. Dengan itu berlakulah upacara angkat sumpah di dalam masjid dihadapan al-Quran dan mendapat liputan secara langsung di media. Begitu juga dalam kes video seks yang menggemparkan Malaysia, di mana ramai pihak menuntut Orang Kena Tuduh untuk bersumpah dan beranggapan ianya perlu dan wajib dilakukan. Kes terkini merujuk kepada pasukan bolasepak T-Team yang melaksanakan upacara sumpah di depan al Quran berkenaan dengan insiden pergaduhan di stadium Larkin Johor. Begitu juga dengan kes-kes lain yang melibatkan pihak sesuka hati bersumpah malahan dilaksanakan dengan menjunjung al Quran.

Melihat kepada perihal ketidak atau kurang fahaman umum mengenai konsep sumpah dalam Islam, penulis ingin berkongsi sedikit pengetahuan berkenaan dengan ruanglingkup undang-undang Islam terhadap perlaksanaan sumpah dan aplikasinya. Dengan informasi dan penjelasan yang diberikan, diharapkan selepas ini tiada lagi desakan dari pihak tertentu untuk sesuka hati meminta sesiapa bersumpah. Sesungguhnya hanya ilmu pengetahuan dan kejujuran serta keihklasan dalam memahami konsep sumpah ini akan memelihara masyarakat dari pelbagai mehnah dan tohmahan.

2.0 Konsep Sumpah (Al-Yamin) dan Pembahagian

Menurut bahasa al-yamīn bermaksud kanan atau bahagian kanan, dan di dalam bahasa melayu al-yamīn bererti sumpah. Istilah lain yang digunapakai juga merujuk kepada al-yamīn ialah al-halaf, al-istihlaf, al-Ila’ dan al-qasam. Dari sudut istilah pula, al-yamīn ditakrifkan sebagai: “Suatu lafaz yang digunakan untuk menyatakan (mensabitkan) haknya terhadap sesuatu perkara atau menafikan sesuatu perkara dengan menyebut nama Allah S.W.T atau sifat-sifatNya”. Melalui pentakrifan ini, sumpah yang dibuat dengan memegang atau menjunjung al-Quran di mana sering kali menjadi anggapan ramai sebagai syariat Islam bukanlah amalan yang dituntut oleh syarak.

Bagi memahami konsep sumpah dengan lebih mendalam, kefahaman terhadap pembahagiannya adalah amat penting. Secara umumnya sumpah dibahagikan dua bahagian iaitu di luar mahkamah (al-Yamīn ghair al-Qadha’iyyah) dan dalam mahkamah (al-Yamīn al-Qadha’iyyah). Walaupun kedua-dua al-yamīn bertujuan untuk menguat dan mengukuh sesuatu tetapi terdapat beberapa perbezaan dari segi hukum dan kaedah pemakaiannya. Al Yamin di luar mahkamah adalah tidak tergolong dalam kategori pembuktian yang diterima untuk sabitan apa-apa kes. Manakala al-Yamin di dalam mahkamah menjadi keterangan (al-Bayyinah) dan boleh diterima pakai untuk sabitan di dalam kes mal (sivil) sahaja. Apa-apa bentuk al-Yamin atau sumpah di dalam kes-kes yang melibatkan jenayah seperti hudud, qisas dan taa’zir tidak boleh diterima pakai sebagai pembuktian untuk sabitan.

2.1 Al-Yamīn Di luar Mahkamah (al-Yamīn Ghair al-Qadha’iyyah)

Al-Yamīn di luar mahkamah juga bertujuan untuk menguat dan mengukuhkan sesuatu perkara. Tetapi al-yamīn ini tidaklah menjadi salah satu cara pembuktian berbeza dengan al-yamīn di dalam mahkamah. al-Yamīn ghair al-Qadha’iyyah bergantung sepenuhnya kepada niat yang orang melafazkannya, sekiranya lafaznya berbeza dari apa yang diniatkannya ia disebut sebagai ‘Tauriyyah’. Tauriah semasa bersumpah adalah tidak dibenarkan samasekali sekira bertujuan untuk menganiayai orang lain bahkan ia merupakan perbuatan yang diharamkan. Pembahagian al-yamīn di luar mahkamah boleh dibahagikan kepada empat iaitu al-yamīn al-munaqidah, al-yamīn al-lagha, al-yamīn al-ghumus dan al-Yamin Mubahalah.

Al-Yamīn al-Mun’aqidah.

Al-yamīn al-Munaqidah iaitu sumpah yang bersungguh-sungguh dan sah. Ia merupakan suatu sumpah terhadap sesuatu perkara pada masa yang akan datang sama ada untuk dilaksanakan atau meninggalkan sesuatu perkara. Sekiranya seseorang itu melanggar apa yang disumpahkannya maka wajib dikenakan kafarah.

Al-Yamīn al-Lagha

Al-Yamīn al-Lagha adalah jenis sumpah sia-sia yang mana orang yang melafazkan sumpah tersebut tidak berniat untuk bersumpah. Ianya juga boleh ditakrifkan sebagai sumpah terhadap sesuatu yang tidak disangkakan menepati ianya bersumpah sebagaimana ia bersumpah akan tetapi ternyata tidak tepat atau dalam erti kata lain sumpah yang dimaksudkan dengan sesuatu tetapi lidah menyebut perkataan lain. Para fuqaha berpendapat bahawa sumpah jenis ini tidak dikenakan kafarat kepada sesiapa yang melanggarnya.

Al-Yamīn al-Ghumus

Al-Yamīn al-Ghumus ialah sumpah bohong yang merendahkan hak-hak atau bertujuan membuat dosa dan khianat serta ia tergolong di antara dosa-dosa besar. Ghumus itu bermaksud menjerumuskan pelakunya ke dalam neraka. Mengikut pendapat mazhab Shafie diwajibkan juga kafarat kepada sumpah bohong ini.

Al-Yamin al-Mubahalah

Al-Yamin al-mubahalah ialah sumpah saling melaknat sesiapa yang berbohong antara kedua-dua belah pihak, termasuk orang yang bersumpah. Di antara perkara yang perlu diberi perhatian pada sumpah mubahalah ialah ianya adalah bentuk sumpah di luar mahkamah yang berlaku untuk mempertahankan diri dan bukan untuk melakukan tuduhan kepada orang lain. Sekiranya apa yang disumpah tidak betul, sesuatu yang batil atau berbohong orang yang bersumpah juga termasuk dalam mereka yang dilaknat dalam sumpahan itu. Perlu diingat keperluan kepada al-Yamin mubahalah tidak menjadi tuntutan sekiranya kes sedang dibicarakan di Mahkamah. Ini kerana ianya boleh mengganggu proses keadilan di Mahkamah yang melibatkan banyak kaedah pembuktian yang lain seperti al-Iqrar, al-Syahadah dan al-Qarinah. Malahan sumpah mubahalah dianjurkan hanya selepas pelbagai cara diusahakan untuk menyelesaikan perbalahan dan sekiranya terus buntu barulah ianya boleh dilaksanakan. Sheikh Yusuf al-Qaradhawi mengingatkan bahawa mubahalah bukanlah perkara yang baik dan mudah dilakukan begitu sahaja, sebaliknya ia berlaku dalam perkara-perkara yang sangat penting dalam agama sahaja.

2.2 Al-Yamīn Di Dalam Mahkamah (al-Yamīn al-Qadhaiyyah)

Al-yamīn al-Qadhaiyyah berfungsi untuk mensabitkan atau menafikan sesuatu dakwaan ke atas seseorang dan ia bergantung kepada niat orang yang mengarahnya iaitu Hakim. Ianya hanya terpakai untuk sabitan dalam kes mal. Menurut kitab-kitab fiqh, al-yamīn yang dilaksanakan dalam sesuatu penghakiman terbahagi kepada tiga bahagian iaitu Yamīn al-Mudda’a ‘alaih, Yamīn al-Mudda’i dan Yamīn al-Syahid.

Yamīn al-Mudda’a alaih

Yamīn al-Mudda’a alaih ialah sumpah yang dilafazkan oleh yang kena dakwa atas arahan hakim merujuk kepada permohonan yang mendakwa bagi menguatkan jawapan terhadap dakwaan. Ia juga dikenali sebagai Yamīn al-Asliyyah, Yamīn al-Dafī’ah dan Yamīn Al-Rafī’ah. Ulamak Hanafiyyah juga menamakan sebagai sumpah wajib (Yamīn al-Wajibah).

Yamīn al-Shahid

Yamīn al-Shahid akan dilaksanakan oleh saksi sebelum sesuatu kesaksian dibuat. Sumpah ini bertujuan memberi kebenaran atas kepercayaan. Pada Masa ini al-yamīn jenis ini menjadi ganti kepada tazkiah kepada saksi.

Yamīn al-Mudda’i

Imam Abu Hanifah dan sahabat-sahabatnya hanya menerima Yamīn al-Mudda’a alaih (sumpah yang didakwa) dan menolak selain daripada itu. Namun jumhur yang terdiri daripada Maliki, Shafie, Hanbali dan lain-lain menerima pakai yamīn al-Mudda’i. Menurut para ulamak yang menerima Yamīn al-Mudda’i, ia terbahagi kepada tiga bahagian iaitu Yamīn al-Jalibah, Yamīn al-Tuhmah dan Yamīn al-Istizhar.

i. Yamīn al-Jalibah: Sumpah yang dilaksanakan oleh al-mudda’i untuk mensabitkan hak-haknya. Sebab-sebab yang memerlukan sumpah ini adakala ianya keterangan seorang saksi sahaja iaitu sumpah bersama seorang saksi (al-yamīn ma’a al-Syahid) adakalanya kerana nukul al-mudda’a alaih daripada al-Yamīn al-asliyyah dan dikembalikan kepada al-mudda’i supaya bersumpah atau dinamakan al-yamīn al-Mardudah atau al-Munqalibah. Adakalanya al-yamīn al-Jalibah digunakan kerana lauth iaitu yamīn al-Qasamah dalam kes pembunuhan atau kecederaan. Kadangkala ia juga dilaksanakan kerana Qazaf suami terhadap isterinya iaitu dikenali sebagai al-Yamīn al-Li’an dan adakalanya amanah kerana setiap orang yang diberi amanah dan mendakwa telah memulangkan barang tersebut kepada tuannya. Maka dibenarkan dakwaannya dengan bersumpah kecuali pemegang barang gadai, penyewa dan peminjam tidak dibenarkan dakwaan mereka melainkan jika ada bayyinah.

ii. al-Yamīn al-Tuhmah: Sumpah yang diarah oleh Hakim kepada orang yang mendakwa bertujuan untuk menolak dakwaan yang tidak dapat dipastikan kebenarannya. Sumpah ini diterima pakai oleh mazhab Maliki dan Zaidiyyah.

iii. Yamīn al-Istizhar: Bentuk sumpah ini yang paling kerap digunakan dalam menyelesaikan sesuatu pertikaian di mahkamah Syariah. Yamīn al-Istizhar juga disebut sebagai Yamīn al-Istithaq atau Yamīn al-Istibra’ iaitu sumpah yang dilakukan oleh orang yang mendakwa atas permintaan hakim untuk menolak tohmah terhadapnya selepas ia mengemukakan dalil dan keterangan yang diperlukan dalam dakwaan. Lazimnya Yamīn al-Istizhar ini dilaksanakan bagi tuntutan yang berhubung dengan hak ke atas orang yang ghaib atau mati.

4.0 Kesimpulan

Konsep sumpah di dalam Islam merupakan salah satu cabang ilmu yang perlu difahami secara mendalam oleh pengamal undang-undang manakala kesedaran dan kefahaman asas pada konsep ini perlu diserap dan diperjelaskan kepada masyarakat. Akibat dari ketidak atau kurang fahaman atau buat-buat tak faham pada konsep sumpah ini membuatkan ketidakselesaan dan persengketaan di dalam masyarakat. Desakan pihak tertentu untuk bersumpah dalam pelbagai aspek menunjukkan krisis intelektual dan kedangkalan tahap kefahaman Islam. Kini sumpah juga diheret dalam kancah bolasepak negara. Begitu jelas ketidakfahaman dan tahap kesedaran masyarakat mengenai konsep sumpah ini.

Sumpah yang boleh diterima pakai untuk sabitan kes adalah sumpah yang dibuat di mahkamah dan menurut syarat-syarat yang ditetapkan. Sumpah sebagai kaedah pembuktian hanya terpakai di dalam kes mal dan ianya tidak boleh diterima di dalam kes jenayah seperti kes liwat, zina, qazaf dan sebagainya. Sumpah di luar mahkamah bukanlah sesuatu perkara yang digalakkan di dalam Islam. Sumpah mubahalah misalnya, bukanlah boleh dilaksanakan sesuka hati sesedap rasa. Ianya hanya boleh dilakukan sekiranya pelbagai cara lain telah dilaksanakan dan tiada kaedah lain lagi yang boleh menyelesaikan perselisihan. Dalam aspek kaedah bersumpah pula, amalan bersumpah menjunjung atau mencium atau mengusap atau mengangkat al-Quran bukanlah tuntutan ajaran Islam. Sumpah cukup dengan menyebut nama Allah S.W.T atau sifat-sifatNya.

Penjelasan ringkas mengenai konsep sumpah di atas diharapkan dapat merungkai dan memberi kefahaman yang sewajarnya terhadap ruanglingkup dan aplikasi sumpah menurut hukum syarak. Masyarakat umum atau pihak tertentu janganlah terlalu teruja dan terkinja untuk mendesak individu untuk bersumpah sebagai kaedah menyelesaikan pertikaian dan perselisihan. Sumpah yang menyandarkan kepada nama Allah Subhanahuwataala atau sifat-sifatNya tidak boleh dipermain-mainkan dalam bentuk apa sekalipun. Amalan mendesak atau memaksa individu bersumpah di dalam masyarakat perlu dihentikan atau kita akan hanya terus mengamalkan perkara yang tidak dituntut oleh syarak malahan boleh mencetuskan kemurkaan Allah Subnahuwataala.

Best Regards
ZULKIFLI HASAN

P5080107
Muscat, Oman

Islamic Finance Isn’t Just About Religion – Sometimes It’s Just Good Business

Islamic Finance Isn’t Just About Religion — Sometimes It’s Just Good Business
By International Business Times

By Kathleen Caulderwood Available at: http://www.investing.com/news/economy-news/islamic-finance-isn’t-just-about-religion—-sometimes-it’s-just-good-business-265197

Eric Meyer, a hedge fund manager, finds himself flying from Connecticut to the Persian Gulf at least once every four to six weeks.
Islamic Finance Isn’t Just About Religion — Sometimes It’s Just Good Business

His favorite city there is Dubai, where he’s had an office in the Jumeirah Lakes district for the past five years. It’s a long way from his native Missouri, where he grew up with no idea that his future career in finance would depend upon the Gulf States, a few sheiks and Shariah law.
“When I started out in finance, the Middle East to me was just a very interesting place to read about,” Meyer said.
Today, he’s the president, CEO and chairman of Shariah Capital, a U.S.-based company that creates and customizes Islamic finance products.

A bank staffer speaks on the phone inside the Bank Islam branch office in Shah Alam, outside Kuala Lumpur, Nov. 6, 2013. Reuters
Meyer got into the business after visiting a portfolio-manager friend in Kuwait more than a decade ago who happened to be related to the president of one of the country’s largest banks.
“So his uncle said, ‘I wish one of you guys would take Islamic finance seriously, because the guy who takes it seriously can really add tremendous benefits,’” Meyer recalled.

That’s how it started.

This year will be Meyer’s 15th in Islamic finance, and it’s going to be a good one.
On Thursday he and two partners (one American, one Saudi) announced their new wealth management firm, Mahal Thqa Financial Advisors. They’ll offer independent advice to Islamic investors on ventures that follow Shariah rules.

Meyer is one among many in the industry who expect big things for Islamic finance in the next few years. “There’s not that many people trying to build out Islamic finance, but there should be,” he said. “It’s just hard work and common sense.”
Though the concepts are hundreds of years old, a modern version of Islamic finance has evolved in recent generations to satisfy the needs of people looking to invest without going against their religious beliefs. Besides the moral incentives, there’s real money to be made. The Shariah-compliant sector has grown to $1.6 trillion in assets over the past three decades, according to the Global Islamic Financial Review. It’s becoming hard to ignore – even for the West.

As the markets of the Gulf countries and Malaysia – two of the largest for Islamic finance – begin to recover, Muslim and non-Muslim financiers from around the globe have noticed the growing investor pool with enough cash to make a serious impact.
“We’ve just come through a very difficult period for the financial sectors,” said Toby O’Connor, CEO of the Islamic Bank of Asia, at the Bloomberg Link Doha Conference in April. “We’ve seen enormous change within the big banks – in some cases they’ve pulled out their lending limits to emerging markets.”

In Africa, a handful of countries have already laid the groundwork to enable Islamic banking, and some of London’s newest landmarks were built thanks to Shariah-compliant bonds. Even America’s Goldman Sachs has made forays into the sector, albeit with mixed results. This year also marks the very first Islamic finance program for beef exports in Brazil.

“What you are seeing is an opportunity for Islamic finance to fill some of the voids created by pullback in the conventional markets,” O’Connor said, and he cited the sukuk market as an example. “Sukuk” is an Arabic word that translates literally to “certificates” (it’s always plural) but is understood to represent a bond-like product, though the comparison is not precise.
“As interest-bearing transactions are prohibited under Islamic commercial law, sukuk are used to raise funds using various permissible contracts,” said Habib Ahmed, a professor of Islamic finance at the Durham University Business School, and Sharjah chair in Islamic Law and Finance at the School of Government and International Affairs.

Basically, Islamic investors can’t make money from money. There must be real assets involved that can be easily identified. A sukuk holder can receive rental payments from the leasing of a specific property but cannot lend money to a leasing company.
There are also many places where the money should not be spent. Funds cannot be spent in ordinary banking activities, or fund projects like tobacco or alcohol production. To ensure compliance, Shariah scholars regularly audit financial activities.
It’s generally understood that money will be used to finance projects that are socially responsible. That way, even if someone purchased a sovereign sukuk, they know the money will be spent on activities that promote social good.

Ahmed listed 14 types of sukuk that can be debt-based, asset-based, equity-based and agency-based. The most popular kind are leasing-based (also called ijarah), which is raising sukuk for real estate. Sorting through the products can be complicated, but that hasn’t stopped sukuk issuances from increasing globally as non-Muslim investors have become more interested.
“On the demand side, most purchases are pious Muslims who believe that, for all their imperfections, the sukuk are morally superior to regular bonds,” said Timur Kuran, professor of social science and economics at Duke University.

But religion isn’t the only reason.

“A second source is people looking for diversification,” Kuran said, adding that the social-responsibility aspect is appealing in the same way that an environmentally conscious investor will put money into “green” funds.
Standard & Poor’s released a report on Feb. 5 predicting that sukuk issuances worldwide will top $100 billion in 2014 thanks to higher demand from the Middle East and growth in Malaysia – the world’s largest market.
It’s this combination that makes Africa a burgeoning destination for Islamic finance.

“We believe that for investors looking to buy Islamic bonds outside of traditional markets like Asia and the GCC region, Africa may soon offer a fresh alternative,” the S&P report predicts.
In October, a Nigerian state issued a Shariah-compliant bond, a seven-year instrument that raised about $62 million from domestic pension funds and international investors. Senegal has also announced plans to issue a $200 million sukuk in the first quarter of the year.

Governments that issue sukuk benefit from a new and broad investor base, and the possibility to build up their reserves.
“Sukuk offer an opportunity to tap the large pool of funds from the Middle East and East Asia,” said Anadou Sy, an Africa economist at the Brookings Institute.

Beyond the fact that Africa has a sizeable Muslim population, non-Muslims are also looking for ways to diversify their holdings, Sy said. Also making sukuk more attractive is that they lend themselves to infrastructure projects, which are desperately needed in sub-Saharan Africa. “Domestic revenues will not be enough to finance the large infrastructure projects that governments plan to undertake,” Sy pointed out.

The top 20 Islamic banks in the world have been growing by about 16 percent annually for the past three years, according to Ernst & Young, which has attracted the attention of investors in the developed world as well. The 2013 World Islamic Economic Forum in November was held in London, where Prime Minister David Cameron announced an ambitious plan. “I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world,” he said in a speech.
The U.K., where Musims are 5 percent of the population, already has more Shariah-compliant banks that any other Western country. Shariah-compliant finance is responsible for building the London Gateway and the Shard – the tallest building in Europe – as well as significant investments in a soccer stadium in Manchester and even parts of the Olympic Village.

“There are some countries whose instincts sometimes incline toward pulling up the drawbridge. But if they do so, they fail to recognize that the way the world is changing affects their future success,” Cameron said. “Britain will not make that mistake.”
Islamic finance is becoming more common in the United States as well, though there are more challenges than in Britain.
“When you look at the U.S., there are a few key challenges to growth in the sukuk market – the first is political will,” observed Kavilash Chawla, managing director of Nur Global Strategies, a Chicago-based Islamic finance advisory firm.

Chawla cited Cameron’s speech in London, and noted, “It’s very unlikely we would ever see any sort of similar language out of the U.S.”
He also referred to problems Goldman Sachs had when it attempted to issue sukuk. In 2011, the bank announced that it would issue $2 billion worth, but just over a year later, scholars from Abu Dhabi Islamic Bank determined that their program was not compliant with Islamic law, since the funds would go to the bank’s non-Shariah business.

Despite that setback, many Americans are still looking to get involved.

“Retail consumers are looking for financial products that are aligned to their value base,” Chawla said, adding that corporate non-Muslim consumers are also interested. “From a pricing perspective, it’s attractive,” he said.

Part of what Chawla’s firm does is facilitate connections between American companies and Islamic investors. He gave an example of one Midwestern company he’s advising on Shariah-compliant financing to help appeal to investors from the Middle East. The management didn’t know much about Islamic finance, but it is interested in making the process work. The main problem with his American customers is that they think the process is more complicated than it is. But this will improve with time and familiarity, he said.
Shariah, after all, is a particularly freighted term in the U.S., where it carries negative political connotations. That’s partly due to a general lack of understanding of what Shariah entails, particularly relative to the financial world. In August, for example, North Carolina became the country’s seventh state to sign into law a bill that officially prohibits its judges from “considering” Islamic law.

But on the corporate side, politics aren’t the problem.
“The clients don’t understand how you access some of the Shariah-compliant capital that’s out there,” Chawla said. “They don’t have a deep understanding of how to structure sukuk or how it affects costs.” Explaining those things is part of his firm’s role.
Many of the companies Chawla works with are non-Muslim and are simply trying to tap into a market with major potential. He said he’s working with a large U.S.-based project in the Midwest that’s making forays into the halal food industry and wants their finances to align with Islamic law.

Though many of these ideas are new to American companies, they’re more familiar farther south. According to the CIA World Fact Book, Muslims represent less than 1 percent of Brazil’s population, but more than 40 percent of the country’s farmers are well-versed in the nuances of halal – the process of slaughtering animals according to Islamic law, which only takes an extra two or three seconds, according to Juan Fernando Valdivieso and Muneef Tarmoom, co-founders of Abu Dhabi Equity Partners, an investment firm that recently initiated Brazil’s first Shariah-compliant livestock finance program. They’ve been working in Brazil for years, and said that many Islamic practices are well-known to farmers there. “They’re extremely accustomed to it because it’s an emerging market for them,” Valdivieso said, adding that almost all exports of halal beef will go to countries in the Gulf.

The pair has also organized Shariah-compliant financing for ethanol, sugar and soy exports. To them, Brazil represents an ideal place to work. “Given the significant trade between the Middle East and Brazil, it was certainly an area we were looking at from a macro perspective,” Tarmoom said, citing Brazil’s high favorable interest rates, among other factors.
“It allows us to extract a larger profit rate, while keeping the risks contained,” he said, adding that now is the time to move in these markets as European and global banks begin to scale back their exposure.

To Tarmoom and Valdivieso, it’s a bet on South-South trade – trade between emerging markets – that they feel is only going to keep growing. And given the fact that a large proportion of the populations in developing countries in the Middle East, South Asia and Africa will be looking for Shariah-friendly ways to finance their projects, they and others promoting these products should be well-placed for the future.

Regards
Zulkifli HasanIMG-20120127-00347
With late Ashgar Ali Engineer in Bangkok

Islamic finance ‘relevant to all faiths’

Islamic finance ‘relevant to all faiths’

Available at: http://www.tradearabia.com/news/BANK_251542.html

A majority of non-Muslim UK consumers believe that Islamic finance is relevant to all faiths, said a recent survey.

The first national survey by UK-based sharia-compliant retail bank Islamic Bank of Britain pointed out that about 66 per cent of those surveyed felt that sharia finance is appropriate in a modern western society.

The survey, which was conducted by 2Europe, an independent research company, questioned 300 British Muslim and non-Muslim consumers across the UK.

It was aimed at finding the British consumers’ understanding of and attitudes towards Islamic finance.

The survey said that about 60 per cent of the consumers agreed that Islamic banking works different to the way conventional banking works, and it pays profits rather than interest on savings products and charges rent not interest on their home finance products.

About 58 per cent of those surveyed considered Islamic finance to be an ethical system of finance and one which considers the impact of its activities on society

A specific focus on the 200 Muslim customers and prospective customers surveyed showed that about 36 per cent of Muslims currently use sharia-compliant finance, of which nine per cent use it exclusively.

A further 45 per cent of Muslims, who don’t currently use sharia-compliant finance, are very likely to consider doing so in the future, it said.

Sultan Choudhury, managing director of IBB, said: “IBB has long been considered the pioneer of sharia-compliant retail banking. It’s therefore fitting for the bank to mark its 10-year anniversary by revealing findings from the UK’s first survey into British consumers’ attitudes of Islamic finance.

“The insights also come at a time when the UK Islamic finance sector as a whole is set to embark on several important developments, including the launch of a Sovereign Sukuk, due later this year.” – TradeArabia News Service

Regards
P1170755
Tokyo