The New Mainstream: Islamic Private Equity and Competitiveness

Is Islamic private equity under-rated or over-sold? Untapped or ill-deployed? There is very little data available on the viability, success (or for that matter failure) of current and previous efforts in this space. While advertorial in nature, this piece suggests a variety of opportunities are available due to three key factors: Demand, Means and Support. However it suggests that in order to activate this there are four challenges faced by the industry: Standardization, Engineering, Education and Human Capital.

The New Mainstream: Islamic Private Equity and Competitiveness
Seera Investment Bank
November 2008

Adopting and Measuring Customer Service Quality in Islamic Banks

Adopting and Measuring Customer Service Quality in Islamic Banks: A Case Study of Bank Islam Malaysia Berhad

by Shahril Shafie, Dr Wan Nursofiza Wan Azmi and Professor Sudin Haron

KLBS - Working Paper Series 001

2004

3rd IFSB Public Lecture on Financial Policy and Stability

3rd IFSB Public Lecture on Financial Policy and Stability

In conjunction with the 15th Meeting of its Council, the Islamic Financial Services Board (IFSB) is organising its 3rd Public Lecture on Financial Policy and Stability on 23 November 2009 in Kuala Lumpur, Malaysia. Bank Negara Malayia (BNM) is kindly hosting both the Meeting of the Council and the Public Lecture.

Mr. Paul Koster, Chief Executive of Dubai Financial Services Authority, and Mr. Jean Pierre Sabourin, Chief Executive Officer, Malaysia Deposit Insurance Corporation will speak in the Public Lecture, which is scheduled to be held at 1:30pm – 5.15pm.

You can view the downloadable programme at the IFSB website. Should you wish to attend the both the Public Lecture and the High Level Conference, or either one of these events, please fill up the online registration form, or email/fax in your details to the IFSB Secretariat.

For more information contact:
Ms. Puteri Bahrun
Email: puteri@ifsb.org
Tel: + 603 2698 4248 ext: 114

Islamic Finance - Podcasts & Webcasts

Here we feature a collection of educational multimedia materials (both video webcasts as well as audio podcasts) offered by the CFA Institute. This provides an opportunity to learn about various concepts of Islamic finance, topics include structuring sukuk, corporate governance, and the role of standard setting bodies in Islamic finance (this is also complemented by various introductory pieces as well). The list of experts includes Professor Rodney Wilson, Shaykh Yusuf Talal DeLorenzo, Rushdi Siddiqui, Professor Simon Archer, Professor Rifaat Karim, Richard de Belder, and Mohammed Amin (among others).

This list will expand in the near future as they plan to add new webcasts periodically. Similarly we plan to highlight much more multimedia content in the near future.

These webcasts are available for free but a registration is required for non-members of CFA Institute (creating an account to login will be created instantly).

With thanks to Usman Hayat for his assistance with the materials.

DFSA - Enhancing Clarity and Accessibility of Islamic Finance Rules

Consultation Paper No. 66 Enhancing Clarity and Accessibility of Islamic Finance Rules

The DFSA is proposing to restructure the rules relating to Islamic finance to better promote the visibility and accessibility of the DFSA's regulatory regime (as it applies to Islamic financial activities conducted within the DIFC).

Comments and feedback can be sent to (note deadline is December 4th):
Dhammika Amukotuwa
Associate Director, Policy and Legal Services, DFSA
Email: DAmukotuwa@dfsa.ae

The relevant files are as follows:
Consultation Paper in PDF Format
Appendix 1 — Proposed New IFR Module
Appendix 2 — Sample of a Virtual Handbook

The Future of Takaful: Potholes in the Streets of Gold?

The Future of Takaful: Potholes in the Streets of Gold

by Peter Hodgins and Caroline Jaffer

Clyde & Co

August 2009

Opalesque Islamic Finance Intelligence - Fourth Issue

We are back after a month filled with journey (the OIFI team has been travelling of late: Malaysia, Jordan, UK, UAE and more to come) and correspondingly our fourth installment incorporates content from all corners of the globe. We begin by exploring the potential synergies available across the industry (and whether it is in need of a catalyst to spur further growth and collaboration) in our editorial piece.

Complementing this is our Featured Resource section which outlines a variety of country and regulatory perspectives on Islamic finance, exhibiting how approaches can differ widely from one country to another. While some of it is positioning, they are testament to the importance being placed on Islamic banking and how regulators are hard at work trying to address and incorporate it into their existing financial architecture.

Nevertheless this is not just a case of mere talk--what is transpiring beyond the boardrooms of IFIs is in fact very energetic discourse that is gradually developing into a tangible initiative. There is great expectation that this can take the shape of an industry-wide effort (resilient to commercial interests) and one which we look forward to reporting in the near future. Indeed we explore the roots of this initiative in our Discussion Board as we borrow the topic from our online forum: 'Does Islamic Finance Need a Voice'.

In this edition OIFI dives deep into multiple asset classes: The Featured Structure section tackles Islamic REITs and the apparent underutilization of liquid real estate products. Khalil Khoury of KIPCO Asset Management Co. provides his perspective on the investable universe of Shariah compliant products in the Allocator Interview section. We further investigate what might be in store for indexation products in our Fund Manager Interview, as we converse with Saeid Hamedanchi of Florentez Investment Management. To round it out, our Industry Snapshot profiles the latest research undertaken on Islamic equity funds, as we hear from the team of Andreas Hoepner, Hussain Rammal and Michael Rezec.

Further expanding on his Lex Islamicus column, Khalil tackles arbitration and enforcement in Islamic contracts - with particular relevance on the revitalized sukuk market. On the other hand, Nikan surveys the various currents of thought on existentialism in Islamic finance under the Opinion Column - with a compendium of views that are not only contrary to the mainstream but possibly test the resolve of Islamic Bankers. But what doesn't kill us makes us stronger.

As always, we welcome your comments & suggestions (you can also feedback directly to the authors), and we remind our registered readers that you have free access to the entire archive of Opalesque Islamic Finance Intelligence (including back issues) and Opalesque Islamic Finance Briefing (our daily news summary), an ever-growing historical data bank of industry news and articles.

Download Opalesque Islamic Finance Intelligence here

New Linkedin Subgroups

As our Linkedin group has continuously expanded (well over 2,700 members and more than 200 relevant discussions) we have launched smaller subgroups to allow for more focused interaction between like-minded members (we recognize Linkedin requires registration but it is free and very useful in many other respects). We now have four subgroups that cater to the following themes:

• Islamic Finance - Accounting & Auditing
• Islamic Finance - Careers & Education
• Islamic Finance - Funds & Asset Management
• Islamic Finance - Takaful & Pensions
• Islamic Finance - Research & Reports

Takaful: Concepts & Practise

Takaful: Concepts & Practise

Thursday 29 October, 2009

Islamic Banking & Finance Network - Hong Kong

Fee & Registration required

(RSVP by 23rd October)

Featured Speaker: Hussain Ahmad, Consulting Actuary, Towers Perrin

Hussain Ahmad, a qualified actuary in the insurance consulting business of Towers Perrin, covers conventional insurance, Takaful, and financial risks for firms across Asia and the U.S. His extensive experience includes conducting M&A due diligence for the general and life insurance sectors, analyses of market entry strategies and start-ups, as well as advising institutional clients on Takaful concepts and their implications on valuation. Prior to Towers Perrin, he worked with Pakistan’s Securities and Exchange Commission on Takaful Rules and other regulations. Hussain is a Fellow of the Casualty Actuarial Society (FCAS) and earned a Master of Finance from Hong Kong University and a B.Sc. from Drake University in the US. He is a regular contributor to industry publications and a noted speaker at leading industry events (and a member of our Linkedin forum).

Islamic finance: a recent history with France, a longstanding history with its banks

This paper from the Reims Management School provides a wide overview of the "breakthroughs, challenges and opportunities" faced by the Islamic finance industry in France. It delves into a historical review and an overview of French institutions already involved in Islamic financial transactions. Most importantly it delves into various current issues such as the Fiscal & Legal adjustments being sought. With thanks to the author for providing the paper.

Islamic finance: a recent history with France, a longstanding history with its banks
Ghassen Bouslama, PhD.
Professor of Finance, Reims Management School
July 2009

For our francophone readers: La finance Islamique: une recente histoire avec la France, une longue histoire aves ses banques

Islamic Mutual Funds' Financial Performance and Investment Style

This particular study scrutinizes the performance of Islamic funds with much more comprehensive data of the existing universe of investment products and at the same time delving deeper into the implications of the data. While some of the conclusions would have been voiced within the industry, this study provides much more solid evidence to support/substantiate them.

Islamic Mutual Funds' Financial Performance and Investment Style: Evidence from 20 Countries
Andreas G. F. Hoepner (1), Hussain G. Rammal (2) & Michael Rezec (1)
(1) School of Management, University of St. Andrews, UK
(2) International Graduate School of Business, University of South Australia, Australia

September 2009

Abstract: "We contribute to the investment literature by pursuing the first sophisticated, large scale analysis of a strongly growing mutual fund type: Islamic funds. Despite hundreds of Islamic funds exist the few previous studies investigate the financial performance of less than 60 and the investment style of 6 funds. Based on unique data access, we analyse the financial performance and investment style of 262 Islamic equity funds from twenty countries. We develop a (conditional) three level Carhart model to simultaneously control for their exposure to different national, regional and global equity markets and investment styles. Our findings are fourfold. First, Islamic funds from eight (mainly western) nations significantly underperform their international equity market benchmarks, while funds from only three nations do the opposite. Second, Islamic funds generally prefer small stocks but have no preference for other investment styles. Third, Islamic funds from the Gulf Cooperation Council (GCC) or Malaysia neither significantly underperform nor clearly prefer small stocks. These three findings have some theoretical appeal, as Islamic funds’ investment universe is limited to Shari’ah law compliant companies, which are more likely small and present in economies with a higher density of Muslims. Fourth, we find some evidence that Islamic equity funds exhibit a hedging function, as their investment universe is limited to low debt/equity ratio stocks."

With thanks to Andreas Hoepner for providing the paper.

Islamic Finance: What leaders do differently

This piece is far more concerned with branding and positioning of Islamic banks in the context of competing side by side with conventional institutions. Not surprisingly items such as product innovation and 'quick' Shariah approval process are prime considerations, among other things. The question remains - does the need to compete vis-a-vis conventional players makes IFIs drift away from their original business model, instruments, and practices??

Islamic Finance: What leaders do differently
Lessons learned from Islamic financial institutions in the GCC

Dr. Helmut Schulte-Croonenberg and Alexander von Pock

A. T. Kearney