Singapore to use Waqf to promote Islamic Education

The Singaporean government is planning an endowment fund to promote Islamic education in the south-eastern Asian country, The Straits Times newspaper reported.

“I am confident that MUIS’s move to create new waqf will pave the way to revive the philanthropic spirit in the community,” Yaacob Ibrahim, Minister-in-charge of Muslim Affairs, told parliament on Thursday, March 8.

“It is a progressive move to keep pace with evolving giving trends and the growing complexity of our financial environment", he added.

The three-million-dollar fund will be created by the Islamic Religious Council of Singapore (MUIS). It will be used to promote Islamic education in the south-eastern Asian country.

Waqf is a permanent dedication of movable or immovable properties by a Muslim for purposes recognized by Islamic Sharia. MUIS handles and develops 200 waqfs properties in Singapore, with a total asset value of S$250 million. These properties, held in trust, yield an annual rental income of millions of dollars, makes Singapore the region’s most advanced country in the development of waqfs.

MUIS is the largest body that caters for the needs of Muslims, who are estimated at between 450,000 to 500,000, making around 15 percent of Singapore’s population.

Yaacob said that he hopes the new waqf fund will revive the philanthropic spirit among Singaporean Muslims.

Over the past years, Muslim philanthropists have created waqfs, whose annual funds are used in funding religious and charitable programs.

He expressed pleasure that more Muslims nowadays are doing financial planning and drawing up wills in accordance with Islamic inheritance law.

As a form of “planned giving”, he suggested that Muslims could pledge up to one third of their estates for the new waqf fund.

The minister gave tribute to the role played by waqfs in Singapore.

He cited the example of a mosque which created a new waqf through the purchase of two properties to sustain the mosque operations.

The minister also called on MUIS to find an appropriate way to promote and adapt waqfs to the modern context.

He said he expects many well-to-do Muslims would like to contribute to the community.

http://www.ummid.com 

Global Islamic funds assets grow to $58 Billion in 2010: Challenges remain for future performance

According to the 5th annual Ernst & Young Islamic Funds & Investments Report (IFIR 2011) released at the World Islamic Funds and Capital Markets Conference, global Islamic fund assets under management (AuM) grew by 7.6% to $58 billion in 2010, up from $53.9 billion in 2009. The growth was largely due to market performance and partially on account of new money inflows. Concentration in equities remains, as they account for 39% of the $58billion AuM, but bringing new money into equities is challenging. Fixed income, commodities and alternatives did well in 2010, which was a record year for Sukuk with issuance of $50 billion.

As the industry continues to realign itself, 23 new Islamic funds were launched in 2010 while 46 were liquidated. The Islamic funds universe comprises of some 100 fund managers and 800 Islamic funds but represents only 5.6% of the $1 trillion Islamic financial services industry. The addressable universe for Islamic fund managers is in excess of $ 500 billion, growing by 10-15% annually. In the GCC, liquid wealth of Shari'ah sensitive investors is expected to add more than $70 billion to Islamic funds by 2013.

According to Ashar Nazim, MENA Head of Ernst & Young's Islamic Finance Services, "Growth in 2010 is welcome given the industry's flat performance since 2007. Looking ahead, the challenging times are by no means over. There are serious concerns about the increasing likelihood of sovereign debt crisis in Europe and a double dip recession in the US. Both these factors will continue to influence conventional and Islamic asset managers through 2012." 

Three priorities for the industry

As part of its trend-spotting in cooperation with leading Islamic fund managers, the IFIR 2011 has predicted three top priorities for the industry. The first lies in origination and structuring. Fund managers are faced with limited availability of quality Shari'ah-compliant assets and fewer products to invest in. Improving levels of investor and industry trust in their brand and track record will favor established and larger players in origination.

The second priority is to continue to attract institutional and affluent client fund flows. 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. Institutional funds make up 67% of global Islamic funds' AuM while retail funds make up 33%. Access to affluent investors and institutional clients like Waqf, family businesses and takaful operators is central to future growth. Fund distribution models will place more emphasis on alliances to attract institutional and affluent funds over the next few years.

The third priority for the industry is to increase operational efficiency. The 30% fee compression over recent years will force a re-look at the revenue and cost strategy, operating model and most importantly, the risk infrastructure for sustainable growth.

"Achieving scale is even more critical to ensure long term sustainability. Over 70% of funds fall below estimated break-even AuM level of $100 million, while the top 10 have 80% market share. The big will get bigger as the going gets tougher to win investors' trust. The growth performance will be difficult to repeat this year as the Islamic funds industry had benefited from performing markets in 2010, which may be hindered going forward by global economic uncertainty risks," adds Ashar.

Investor uncertainty heightens

"Even though stock prices in the MENA region are near 2004 levels today, investors are not confident about their rise even in 2012. They remember that equity markets were flat for years before the spike began in 2005. The global economic scenario, investors' risk aversion and the aftermath of the Arab Spring are the top three risks for Islamic fund managers. The economic situation in Europe and the US is the single biggest concern for future market performance as no region or market will be immune to a double dip recession," concludes Ashar.

About Author

IFS is a specialist group within Ernst & Young that caters to the specific needs of both Islamic and conventional financial institutions requiring Islamic financial advisory services.  The MENA practice of Ernst & Young has been operating in the region since 1923. Ernst & Young is a global leader in assurance, tax, transaction and advisory services.

© Business Islamica 2011

Malawi creates first Islamic pension fund

Malawi's Vanguard Life Assurance, part of Zimbabwe's ZimRe Holdings, is set to introduce what they say will be Malawi's first Shari'ah compliant pension fund.

Speaking to The Islamic Globe acting MD Emmanuel Saruchera said VLA's Mudaraba Equishare Fund has been created as a result of the Malawi Pensions Act, introduced in June this year that has made the universal holding of a pension fund mandatory.

The fund will invest in conventional investment vehicles that do not compromise Shari'ah stipulations.

Working with the Muslim Association of Malawi, VLA is planning to create further products for the 13% of Malawians that are Muslim.

Saruchera said the fund will be officially launched in December but has already received a high volume of interest from prospective clients nationwide.

© The Islamic Globe 2011

First ever open-ended Shari’ ah-compliant fund launched

By Cassandra Mascarenhas

The first ever open-ended Shari’ah-compliant fund, the Crescent i-Fund, a joint initiative of the pioneer asset management company in Sri Lanka Comtrust Asset Management and ADL Capital Limited, was launched last week in the midst of many prospective investors.

Looking to invest chiefly in Sri Lankan equities, the Crescent i-Fund will provide Shari’ah conscious investors the chance to enjoy significant returns in the Sri Lankan stock markets and the fund’s objective of achieving long-term capital appreciation by investing in a portfolio of Shari’ah compliant equity securities listed on the Colombo Stock Exchange will allow them to do so.

The fund was granted approval by the Securities and Exchange Commission (SEC) of Sri Lanka last month and a Shari’ah Committee consisting of a distinguished panel of scholars of domestic and international repute will ensure that the operations of the Fund will be in accordance with Shari’ah principles and the Deutsche Bank will act as the Trustee on behalf of the investors.

Comtrust Asset Management, a member of the CT Holdings Group is one of the pioneer Unit Trust Management companies to be registered with the SEC and has a senior management team with extensive experience in the Sri Lankan equity markets.

The CT Holdings Group is one of the largest listed conglomerates on the Colombo Stock Exchange, with interests spanning retail, food and beverage, manufacturing, plantations, property development and financial services.

Some of the companies in the group include Cargills (Ceylon), Lanka Floortiles and Lanka Walltile, Horana Plantations, CT Land Development, CT Smith Stockbrokers and CT Properties.

ADL Capital Limited is registered by the SEC as an investment manager and its team of qualified professionals has extensive experience in the burgeoning Islamic finance industry with the combined experience of the key personnel in this industry spanning over a decade. The senior executive team at ADL has also been involved in equity markets, which enabled the company to actively contribute to the development of this pioneering effort.

With an investment policy of investing in long term stocks, the Fund will concentrate on engaging in fundamental research to identify stocks which would provide above-average returns over the long term and will invest in sufficiently diversified portfolios at all times to mitigate the risk of excessive volatility and achieve a satisfactory risk-return trade-off.

Created on 16 May 2011 by a Trust Deed executed between Comtrust Asset Management as the managing company and Deutsche Bank Ag Colombo as the trustee, the Fund will operate as an open-ended unit trust which can offer units to investors on a continuing basis.

The investment objective of the fund will be to achieve long term capital appreciation by investing in a portfolio of equity securities thus allowing investors the opportunity to invest in shares that have been deemed Shari’ah compliant by Shari’ah scholars as per the guidelines issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, the standard setting body for Islamic financial institutions based in Bahrain.

http://www.ft.lk/2011/07/19/first-ever-open-ended-shari%E2%80%99-ah-compliant-fund-launched/

RichWeb launches IslamicFundsFinder.com

First website specialised in Shari'ah-compliant investment funds provides fund managers with the ability to list their funds with three confidentiality levels or viewing options (public, registered investors and selected investors), and at the same time, allows investors to search for investment or placement opportunities based on search criteria such as fund type, asset class, industry and country.

UAE-based RichWeb - a member of Tharaa Holding said it has launched IslamicFundsFinder.com, which it claims is the first specialised website in the world that highlights the Shari'ah-compliant investment funds sector and lists fund management companies and consultants.

“The website aims to actively contribute to the development of the Islamic investment funds  sector through providing information and updating investors on new investment opportunities, and forming a database for Islamic fund management companies and related companies  thus to become one of the best references in the field,” the company said in a statement.

Shabeer Mohammed the Managing Director of RichWeb said, "Fund Managers worldwide have been affected by the global financial crisis, and the market dynamics have created new challenges for them.  One of the key new challenges is the ability to attract investors and conduct placement activities targeting existing and new investors. IslamicFundsFinder.com comes as one of the solutions for this new challenge by allowing Islamic fund managers worldwide to list their funds and reach investors from around the world. The portal provides fund managers with the ability to list their funds with three confidentiality levels or viewing options (public, registered investors and selected investors), and at the same time, allows investors to search for investment or placement opportunities based on search criteria such as fund type, asset class, industry and country.  The portal also allows for listing funds that are launching soon, which allows registered investors to receive notices on relevant opportunities once they are listed"

The launch of IslamicFundsFinder.com comes after the launch of two other portals by RichWeb BusinessBuyAndSell.me and PrivateEquities.me over the past five months.  All portals have been launched in BETA (trial) status and will be officially launched in September this year.

Link: http://www.cpifinancial.net/v2/News.aspx?v=1&aid=2400&sec=Islamic%20Finance