Latest from GIFC

Tuesday, 31 January 2017

Global Sukuk Issued in 2016 Breakdown by Structure

Global Sukuk Issued in 2016 Breakdown by Structure.
Wakalah sukuk have the highest value of new issuance, since surpassing murabahah in 2014.
The lowest value is Bai Inah. 

Source: Thomson Reuters
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Monday, 30 January 2017

Islamic Financial Planning & Wealth Management - An Explanation by Ahmad Sanusi Husain (Certified Islamic Financial Planner)

Islamic Financial Planning and Wealth Management by Ahmad Sanusi Husain (Certified Islamic Financial Planner) from Ahmad Sanusi Husain on Vimeo.

Ahmad Sanusi Husain
CEO & Principal Consultant, Alfalah Consulting

/Islamic Unit Trust Consultant, PMB Investment Berhad
Level 14-02, GTower,
199 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
Mobile/WhatsApp/SMS: +6019-234 8786 Tel No: 603 2168 1879

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Al-Majallah al-Ahkam al-Adaliyyah (Al-Mejelle) - a complete code on Islamic civil law

Al-Majallah al-Ahkam al-Adaliyyah
by: Ahmed Cevdet Pasha
Al-Majallah al-Ahkam al-Adaliyyah was the civil code of the Ottoman Empire in the late 19th and early 20th centuries. It was the first attempt to codify a part of Islamic law of the Ottoman empire. 

The code was prepared by a commission headed by Ahmet Cevdet Pasha, issued in sixteen volumes (containing 1,851 articles) from 1869 to 1876 and entered into force in the year 1877. In its structure and approach it was clearly influenced by the earlier European codifications. Covering most areas of civil law, it exempted family law, which remained a domain of religious law. 
The substance of the code was based on the Hanafi legal tradition that enjoyed official status in the Empire, put into European code-form. However, it also incorporated other legal opinions that were considered more appropriate to the time, including from non-Hanafis. 
As the Majalla was eventually applied in the secular courts as well as in the Islamic courts of the Empire, Jews and Christians were for the first time subjected to Islamic law instead of their own law, but could now be called as witnesses in court. 
After the dissolution of the Ottoman Empire, the Majalla remained a lasting influence in most of its successor states . The Mecelle was long-lasting in most places since it was effective, coherent, and difficult to dislodge.  
It remained in force in the following states: 
- Turkey until 1926 
- Albania until 1928 
- Lebanon until 1932 
- Syria until 1949 
- Iraq until 1953 
- Cyprus until the 1960s 
- The British Mandate for Palestine and, later, Israel formally until 1984. 
The Majalla also remains the basis of civil law in Jordan and Kuwait.

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Saturday, 28 January 2017

Islamic Unit Trusts Investment in Malaysia

If you're interested to invest in Islamic unit trusts (Islamic mutual funds) in Malaysia, please send text/whatsapp your Islamic investment consultant at (Mr Sanusi-PMB Investment-KL).

Funds managed by PMB Investment Berhad, an Islamic Fund Management Company (IFMC).

Past (historical) returns: 15-20% p.a on selected equity funds. Funds are approved by the capital market regulator, SC & certified Halal by Shariah Advisors.

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AAOIFI Publishes English Translation of the Shariah Standard on Gold

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has worked towards completion of the English translation of the standard through the technical and professional mechanism that has been approved to authenticate any translation. This mechanism comprises three phases aimed at ensuring quality and accuracy of the translations. It starts with the translation process, followed by revision of the professional and accurate use of terminologies, and ends with the proofreading process which is conducted by a technical, scientific committee composed of seven experts from five countries. They combine deep-rooted knowledge of both languages with Shari’ah experience and legal, banking and financial background.

This follows the large, positive outcomes seen as a result of launching the Shari’ah standard on Gold and the interaction of the global economic markets, the Islamic financial industry and the research and scientific agencies. More than 250 press and media releases were issued in more than 16 live languages from around the world to ensure the utmost perfection and accuracy which coincides with the AAOIFI international standards.

The Shari’ah standards’ Arabic to English Translation Committee met for two days in the Kingdom of Bahrain for an average of 14 hours to conduct the third phase of the translation, proofreading and revision. As a result, AAOIFI published the approved English translation of the Gold standard.

It is noteworthy that AAOIFI has recently published its Standard No. (57) which deals with the Shari’ah rules on gold in its various forms and classifications, in addition to the applicable Shari’ah controls and the rules of the gold-based financial products developed by financial institutions. It is the first Shari’ah standard of its kind that articulates and sets specific rules for investing and dealing with gold. The Standard was completed through partnership and technical and professional support of the Global Gold Council and Amani Investment Company. This effort involved a long scientific and professional journey with more than 100 hours of meetings of elite experts and scientists from all around the world. This is in addition to the innumerable hours spent on preparation, research, logistic support and technical preparations.
Overall, this enhances AAOIFI’s position, and sets its Shari’ah Board and Shari’ah Standards as the most important global Shari’ah reference for the Islamic financial industry.
The electronic copy of the Shari’ah standard can be accessed by clicking here

Source: AOOIFI's web site/28 January 2017
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Adoption of AAOIFI Standards

Shari’ah Standards
AAOIFI Shari’ah standards have been made part of mandatory regulatory requirement in jurisdictions such as Bahrain, Oman, Pakistan, Sudan, and Syria.
AAOIFI Shari’ah standards have also been adopted by Islamic Development Bank Group, a multilateral institution.
In addition, AAOIFI Shari’ah standards have also been used as basis of national Shari’ah guidelines in jurisdictions such as Indonesia and Malaysia.
In other jurisdictions including Brunei, Dubai International Financial Centre, France, Jordan, Kuwait, Lebanon, Saudi Arabia, Qatar, Qatar Financial Centre, South Africa, United Arab Emirates and United Kingdom as well as in Africa, Central Asia and North America, AAOIFI Shari’ah standards have been used voluntarily as basis of internal guidelines by leading Islamic financial institutions.
Accounting, Auditing, and Governance Standards and Codes of Ethics
Accounting Standards
AAOIFI accounting standards have been made part of mandatory regulatory requirement in jurisdictions such as Bahrain, Jordan, Oman, Qatar, Qatar Financial Centre, Sudan, and Syria.
AAOIFI accounting standards have also been adopted by Islamic Development Bank Group, a multilateral institution.
In addition, AAOIFI accounting standards have also been used as basis of national accounting standards in jurisdictions such as Indonesia and Pakistan.
In other jurisdictions including Brunei, Dubai International Financial Centre, Egypt, France, Kuwait, Lebanon, Malaysia, Saudi Arabia, South Africa, United Arab Emirates and United Kingdom as well as in Africa and Central Asia, AAOIFI accounting standards have been used voluntarily as basis of internal guidelines by leading Islamic financial institutions.
Auditing, Governance and Ethics Standards
AAOIFI auditing, governance and ethics standards are not part of mandatory regulatory requirement for Islamic finance.  Instead, these standards are used voluntarily by leading Islamic financial institutions across all major Islamic finance jurisdictions.

Source: AAOIFI's web site/28 January 2017

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Malaysia is ranked no.1 in IFDI (Islamic Finance Development Indicator) - 2016

This report is based on the ICD Thomson Reuters Islamic Finance Development Indicator (IFDI) which represents the overall health and development of the Islamic finance industry worldwide, using one composite and weighted numerical measure. This year’s IFDI tracks the performance of 124 nations assessed against 5 indicators: Quantitative Development (QD), Knowledge, Governance, Corporate Social Responsibility (CSR) and Awareness. The report brings you the latest trends from the industry while highlighting key figures and top performers in the industry.

Source: Zawya & Thomson Reuters
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Wednesday, 25 January 2017

Blow to Islamic Banking in India

Source: Greater Kashmir
Dr Raja Muzaffar Bhat
Date: 24 January 2017
Before handing over his charge to present RBI Governor Urjit Patel, former Governor of Reserve Bank of India Raghuram Rajan had proposed working with the Government to introduce Islamic Banking (interest-free banking) to tackle financial exclusion of a vast Muslim population, who for religious reasons do not go for traditional banking.  
RBI in its 2016 annual report had given its clearance for opening Islamic Banking windows across India. The proposal in this regard was seen as a major shift in the stance of Reserve Bank which earlier had said that Islamic finance could be offered through non-banking  channels like cooperative societies and other investment models. 
Before the RBI recommendations could be discussed by Government of India, Union Finance Ministry recently said that Islamic banking was not relevant any more in achieving the objectives of financial inclusion as the Government has already introduced several programmes  for all citizens towards financial inclusion. In his written reply to the Lok Sabha, Union Minister of State (MoS) for Finance Santosh Kumar Gangwar said various legal changes are needed if even limited products were to be introduced under Islamic banking.
“RBI had set up an inter-departmental group on Islamic Banking. Entire exercise was aimed at promoting financial inclusion, accessing huge market potential to attract finance from Gulf countries for infrastructure development. However, on consideration of inter-departmental group report, it is observed that even to introduce limited products, various legal changes would be required” MoS Finance Santosh Gangwar told Lok Sabha in the recently concluded session of parliament. Gangwar further said that  objectives of financial inclusion for which Islamic Banking was explored by RBI has no relevance, as Government has already introduced other means of financial inclusion for all citizens like Pradhan Mantri Jan Dhan Yojna, Pradhan Mantri Suraksha Bima Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojna, Pradhan Mantri Mudra Yojna etc. Pertinently RBI’s Deepak Mohanty committee in its report posted on the RBI website on December 29, 2015 had recommended that banks open a separate window offering interest free Sharia compliance (Islamic banking)  deposits and advances to address financial exclusion based on faith. Mohanty was fully aware of these programmes and digital banking etc., but he still voiced for Islamic Banking and that should be an eye opener for Modi Government.  It is estimated that 180 million Muslims in India are unable to access Islamic banking because of non-availability of interest free banking.  RBI in its report had said it would explore to introduce  interest-free banking products in consultation with the government, but before the consultation could be held ,  Government of India derailed this whole process. 
What experts say  : 
Syed Zahid Ahmad, Founder of Economic Initiatives a Mumbai based advocacy group on Islamic banking has been networking with several Government and Non Government organisations on adoption of Interest free banking in . In his letter to Mr Santosh Gangwar Minister of State (MoS) Finance Govt of India, Zahid said that as an Indian Muslim he was shocked to know about MoS Finance’s observation on RBI’s proposal to allow Interest-free banking windows in India. “We had been hopeful to get positive support from Government over RBI’s proposal presented for financial inclusion of Indian Muslims. Politically we may differ but as a nation we all are Indians and must protect each other’s interest. I request you to kindly review your observation about interest-free windows after listening our concerns in national interest and through good governance kindly allow us to feel that Sabka Saath Sabka Vikas is really meant to ensure socio-economic justice for all Indians irrespective of the region or religion we belong to” reads Zahid’s letter 
Amidst all difficulties caused after demonetization and fear of declined income and employment opportunities in near future, Muslims feel that December 9th, 2016  is a black day for them when BJP led Government ruined their hopes to avail required finance in future through interest-free windows. “It seems Government was already under pressure of Shiv Sena for genuine critics over demonetization. The plea submitted by Shiv Sena M.P. Shri Chandrakant Baburao Khaire during zero hour in the Lok Sabha for not allowing “Islamic window” in the banking system might have added  pressure for the Government. Thus on Friday, 9thDecember 2016 when Smt. K. Maragatham from AIADMK raised her queries about Islamic windows in banking sector, you perhaps in a desperate mood ruled out RBI’s proposal of interest-free banking windows in India for financial inclusion” Zahid’s  letter further reads 
Sachar Committee in its  2005 report said that  Muslims had 7.4% share in saving deposit amounts with Scheduled Commercial Banks (SCBs)  against 4.7% share in Priority Sector Advances (PSA) outstanding amounts. Besides other factors, main reason for this loss is that Muslims are not able to get interest-free finance from banks. This huge financial loss is putting Indian Muslims economically far behind other communities. If we really want to achieve inclusive growth, we have to ensure financial inclusion among Muslim community . On one side Modi ji gives slogan of “Sabka Saath Sabka Vikas” but when he has to handhold Muslims for achieving this dream, Government ignores them by disallowing interest free banking in India. 
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Positioning Malaysia as hub for Islamic funds

The Securities Commission Malaysia (SC) launched its latest Islamic capital market (ICM) initiative with the unveiling of a five-year Islamic Fund and Wealth Management Blueprint, which vision is for Malaysia to be a leading international centre for Islamic fund and wealth management (IFWM) and to drive further development and growth of the ICM. IFWM, despite having a longer history than sukuk and banking in general, continues to be the Cinderella of the ICM. This is despite the fact that there are almost 1.5 billion Muslims in the world and the size of the Muslim professional and middle classes with an increasing amount of disposable income and affluence, continues to grow both at home and in the diaspora. 

Wealth management in the form of estate planning, inheritance and pension provision in old age is vital both for investment and social security reasons. It is set to proliferate, especially following the launch in January of the dedicated RM100 billion Islamic pension fund, Simpanan Syariah, by the Employees Provident Fund (EPF), which has confirmed its plan to increase the fund by an additional RM50 billion next year. 

But, why has IFWM been slow to take off as the industry enters its fifth decade in its contemporary history? The reasons are manifold. The three main asset classes in investment portfolios are usually gilts (bonds and certificates of various sorts including sukuk), real estate and equities. While in the conventional system, all the above asset classes are tried and tested and culturally accepted, the same is not true of Muslim markets. 

The old adage that Arabs (and many Muslims) prefer to invest in bricks and mortars because they are tangible and can be “felt” is still having a psychological impact in the investment psyche of some Muslims, including high net worth (HNW) ultra-conservative ones. This despite the fact that the real estate sector, especially in the Gulf Cooperation Council countries, has seen several bubbles over the last few decades which has seen market collapses and affected ordinary investors badly. Governments have lowered the ceiling of exposure to real estate of banks and also banned gearing — stopping individuals borrowing money to speculate in property. 

In the equities market, Saudi Arabia and Malaysia are the two largest ICM markets by far, accounting for most of the estimated US$70 billion to US$80 billion (RM310 billion to RM354 billion) global Islamic equities market, of which the kingdom accounts for an estimated US$30 billion to US$40 billion and Malaysia RM132.4 billion. But, they pale in insignificance compared with the conventional counterpart, which has assets under management (AUM) in excess of a few trillion dollars. 

The sudden proliferation of the sukuk market over the last decade has detracted from the development of the equities market as financial institutions spent more resources in innovating sukuk structures as opposed to equity offerings, which on the whole remain vanilla. These asset classes, of course, are subject to the vagaries of economic cycles. Even global sukuk issuances in 2016 for instance is set to top US$80 billion, way below the US$130 billion in the halcyon days of 2012. 

IFWM, like most of the direction of investment financing in the industry has traditionally been geared towards HNW people. The Islamic finance industry has failed to democratise the syariah-compliant investment space, in particular access to capital markets. How many sukuk are aimed at retail and ultra-retail investors? Here Malaysia has set the standard with Dana Infra, which has issued retail sukuk to part fund the LRT expansion in Kuala Lumpur. 

Given that sukuk is now a globally acceptable investment asset class, it is not unusual to see the Californian State Pension Fund as an investor in such certificates. At least, in the equities side, Malaysia’s Islamic unit trusts and the Saudi National Commercial Bank (NCB’s) Al Ahli Islamic equity fund suite have pioneered access to syariah-compliant products. But, whether they have enjoyed the same government support in terms of tax and other incentives is a moot point. 

It is against the above challenging background that Second Finance Minister Datuk Johari Abdul Ghani launched the SC Blueprint on behalf of Prime Minister Datuk Seri Najib Razak. Malaysia has an impressive record of launching blueprints and master plans for the various segments of the Islamic finance industry, backed by the requisite legal, regulatory and enforcement frameworks. This is because it is the only country where Islamic finance has been treated in a holistic, systemic way. The Islamic asset and wealth management blueprint is the latest and, perhaps, belated manifestation. 

Najib in his message in the blueprint was to the point: “The IFWM Blueprint is a further demonstration of the country’s continuing leadership in Islamic finance as we seek to develop yet another new growth driver for the industry to enhance its value proposition and ensure its sustainability.” The three strategic thrusts of the blueprint are predictable — strengthening Malaysia’s positioning as a global hub for Islamic funds; establishing Malaysia as a regional centre for syariah-compliant sustainable and responsible investment; and developing Malaysia as an international provider of Islamic wealth management services. 

Similarly, the 11 recommendations of the blueprint, once again, feigns ambition than substance. There are interesting themes, including enhancing market access and international connectivity; promoting the growth of private equity; facilitating new digital business models, products and services for IFWM; and providing targeted incentives to strengthen international competitiveness. 

SC chairman Tan Sri Ranjit Ajit Singh reiterated at the launch: “As part of the holistic development of Malaysia’s Islamic markets and consistent with the Capital Market Masterplan II, the blueprint will also drive greater internationalisation of the Islamic fund and wealth management industry through enhanced cross-border capabilities and connectivity.” 

The reality, unfortunately, is that the Malaysian IFWM industry and institutional investors have been frustrating, parochial and ultra-conservative in their cross-border activities save for a few forays in Asean and Australia. For the blueprint to realise its potential, a mindset change by Malaysian asset managers is similarly required! 

Writer: Mushtak Parker - an independent London-based economist and writer

Source: New Strait Times (Malaysia)/25 January 2017
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Tuesday, 24 January 2017

Socially responsible entrepreneurship

Source: The Star (Malaysia)
Muhammad Hisyam Mohamad
Date: 24 January 2017

Trade and business have a special position in Islam as a way of earning a living, but they should not have any adverse effect on the interest and well-being of other stakeholders.
Seeking lawful sustenance for one’s livelihood is a religious duty for Muslims, enjoined by Islam.
Islam also suggests the best approach Muslims could undertake in their economic pursuits – an approach that not only serves an avenue to earn halal income, but also has a positive impact on the community’s well-being, from local neighbourhoods to regional locales.
The best way to earn halal income, according to Islam, is through trade and business activities.
Even though the concept of entrepreneurship is not mentioned in the Quran per se, buying and selling (bay’) as well as trade (tijarah) both are. Both concepts are interrelated, to the extent that they are interdependent on one another.
Any business transaction involves an exchange of goods or merchandise for something else of value, such as money.
Thus, if a businessman cannot produce goods on his own, he may require others – in this case, an entrepreneur – to supply them. Without entrepreneurial activities, the supply of goods could be a problem for the business community.
Similarly, an entrepreneur is in need of a businessman to sell the products and goods he produces. Otherwise, he would need to assume both the roles of an entrepreneur and a businessman at the same time, which could result in inefficiencies and impact his productivity negatively.
Therefore, when the Quran and the prophetic tradition mention trade or commerce, we can infer that both also refer to entrepreneurship. Furthermore, the primary motivation of entrepreneurs is to produce products and goods that are then sold or traded to generate returns or income.
A number of hadiths of Prophet Muhammad and Quranic verses signify the advantages of entrepreneurship and business activities.
Among them is the saying of the Prophet quoted by al-Ghazali is his work Ihyaa ‘Ulumuddin (Revival of Religious Sciences): “Take to trade and commerce because nine-tenths of the source of earnings is in trade and commerce”.
In another hadith, the Prophet was reported to have said, “The truthful, trustworthy merchant (on the Day of Judgment) is with the Prophets, the truthful and martyrs.”
While in the Quran, Surah al-Saf, verse 10-11, Allah Almighty says:
“O you who believe! Shall I show you a commerce that will save you from a painful doom? You should believe in Allah and His messenger, and should strive for the cause of Allah with your wealth and your lives. That is better for you, if you did but know”.
In the verse, Allah Almighty uses the word tijarah or “trade” to illustrate the advantages that await those who believe and unconditionally sacrifice their wealth and lives in His path. It is commonly accepted that the primary incentive that drives people to embark on business ventures is to make profit.
As such, if business or trade activities did not have any advantage over other livelihood alternatives, Allah would not have used the word to metaphorically equate its attributes i.e. trading goods and services for profits vis-a-vis wholeheartedly submitting to His Will and sacrificing their wealth and souls to seek protection from His grievous punishment in the Hereafter.
In addition, the central figure of Islam, the Prophet Muhammad, was also an entrepreneur and actually came from a family involved in the field.
Likewise were the companions of the Prophet such as Abu Bakr, Uthman ibn Affan and Abdul Rahman ibn Awf who were successful and generous entrepreneurs and who greatly contributed to the development of Islam.
Clearly, this indicates that entrepreneurship as a livelihood option is highly regarded or has a rather special position in Islam.
The argument is further strengthened by the fact that there are various concepts related to business contracts and business governance that one can find under the umbrella of the fiqh muamalat discipline (the jurisprudence of commerce).
These concepts include mutual agreement between contracting parties (normally investors and entrepreneurs) under the contract of mudarabah (investor partnership) or musyarakah (joint venture) or istisna’ (building payment scheme).
Those relating to governance are more focused on business ethics that guide entrepreneurs and employers on how to deal with customers, suppliers, competitors, employees, the environment and stakeholders.
In general, entrepreneurship is highly valued by Islam, for it is considered a major driver of economic growth and development. However, despite its positive effect on the economic well-being of the nation, entrepreneurship is not above criticism.
One of them is associated with the negative externalities of entrepreneurship, which eventually contributes to environmental degradation and climate change.
The root cause of the problem is the outright greed of individual entrepreneurs who are incentivised by a secular economic worldview that gives total freedom to them in their pursuit to maximise profits.
Islamic economic philosophy on the other hand brought a different message than the capitalist worldview used to.
In Surah al-Qasas, verse 77, Allah Almighty says to the effect: “And seek by means of what Allah has given you, your future Abode, and (yet) do not neglect your portion of this world, and do good (to others) as Allah has done good to you, and do not seek to make mischief in the land; surely Allah does not love the mischief-makers.”
The above verse is generally sufficient to serve as a guide to Muslims, that they should stand on their own feet to earn their livelihood.
This also means that they should abstain from begging or asking others for sustenance or support. More interestingly, Allah enjoins man to do good deeds. He has also forewarned man of misbehaviour which could cause harm to humanity and the planet. In other words, while engaging in economic pursuits for his survival, man should abide by all Islamic values which essentially direct people towards enjoining good (‘amr al-ma’ruf) and forbidding evil (nahy al-munkar).
Any negative externalities (mafsadah) that may arise from activities undertaken should be kept away at all times and at all costs.
Therefore, Muslim entrepreneurs while pursuing their individual interest must emphasise production of useful goods and services. They must ensure that all economic activities carried out do not cause any adverse effect on the interest and well-being of other stakeholders.
This unique philosophical basis is attributable to the far-reaching and comprehensive scope of the Islamic worldview itself which concerns not only the relationship between man and Allah, but also man with his fellow men, and man with other creatures of the universe.
In essence, this is to be understood from the outset by those who want to enter into the world of entrepreneurship.
Muhammad Hisyam Mohamad is Fellow at the Centre for Economics and Social Studies, Institute of Islamic Understanding Malaysia (IKIM). The views expressed here are entirely the writer’s own.
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Sunday, 22 January 2017

Norwegian bank trials 'halal financing' based on Islamic principles

A Norwegian bank has proposed a “halal” financing ("loan") scheme based on Islamic principles which forbid charging interest. 
Storebrand, which operates in Norway and Sweden, launched a website calling for feedback on an idea to launch new interest-free loans to appeal to Muslim home buyers who many not want to take out a traditional mortgage because of their faith. 
Under most interpretations of Islamic law, charging interest or fees on financial loans – known as usury – is considered “haram”, or forbidden.

But under Storebrand’s scheme the mortgages will be replaced by deals which allow the owner and the bank to jointly own a house with the loan holder paying rent until they become the sole owner. 
The bank called on “interested parties” to get in touch and within a week around 300 people had expressed an interest. 
Norwegian Islamic organisations such as the Islamic Council of Norway and the conservative youth movement IslamNet urged their Facebook followers to show interest in the loan.
In a statement on the now closed website, the bank said: “We wanted to find out if this can be another way for people to get into the housing market with ever higher prices. 
“The product may be appropriate for young people, for graduates and people who can not take up ordinary mortgage due to religious considerations.”
Siurce: The Independent/20 January 2017
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Malaysia Seeks to be Global Islamic Wealth Management Centre

With Islamic assets under management of some Rm132.4 billion (US$29.66 billion), Malaysia is well on its way towards establishing itself as the international centre of Islamic wealth management services.
The country’s aim of cementing its position as the Islamic wealth management capital of the world received a boost recently with the launch of a five-year Islamic Fund and Wealth Management Blueprint.
Unveiled by second finance minister Johari Abdul Ghani, the 51-page document focuses on three areas towards solidifying Malaysia as the centre of Islamic wealth management services globally. Specifically it will:
  • strengthen Malaysia’s position as a global hub for Islamic funds
  • establish the country as a regional centre for shariah-compliant sustainable and responsible investment
  • develop it as an international provider of Islamic wealth management services.
Mr Johari said that the recommendations are made to “provide flexibility within the overall target of the blueprint” to enable suitable adjustments, adding that “a tremendous amount of work is, however, required to ensure that the Blueprint strategies are appropriately put into place”.
Addressing the Securities Commission Malaysia (SC) International Fund Forum 2017, Mr Ghani said that with its comprehensive Islamic finance ecosystem and track record in innovation, Malaysia was in an “advantageous position to play a lead role in shaping the concept and driving the development of Islamic wealth management services”.
The blueprint will be implemented over a period of five years and is drawn up with the aim of developing and growing Malaysia’s Islamic capital market.
The first phase will focus on the formulation of a framework for issuance of SRI investment funds, the setting up of the global capacity building centre for Islamic Capital Market (ICM), and the establishment of digital investment services framework.

Asean’s Burgeoning Muslim Middle-Class

Malaysia’s interest in the rapidly growing Muslim middle-class, particularly in Asean where Muslims represent 42 per cent of the Asean Community’s (ACs) population is not without reason.
Speaking at the 12th World Islamic Economic Forum (WIEF) in Jakarta last year, Malaysia Prime Minister Najib Razak said that in 2014-2015 the Islamic economy grew at almost double the global GDP growth rate, while Muslim consumer spending is forecast to reach $2.6 trillion by 2020 (See: Cambodia Aims For Share of Halal Market).
The Islamic market in Malaysia is estimated to have been worth some $1.9 billion in 2013, with officials forecasting it to contribute about 5.8 per cent to Malaysia GDP by 2020.
Malaysia is not the only nation hoping to capture a larger slice of the burgeoning Muslim middle-class. While Malaysia seeks to be the centre of Islamic wealth management services, Cambodia hopes that the introduction of a formal halal certification process for restaurants and food producers will attract more Muslim tourists to the Kingdom and also strengthen the growth of the Kingdom’s nascent halal certified food sector.
Meanwhile, in Indonesia where the Islamic market is valued at more than $10 billion annually and growing at between 7-10 per cent,  the Islamic Development Bank (IDB) announced that to date it had approved $4.2 billion to support development projects.
The Bank said money had been dispersed in the areas of education, health, transportation, communication, industries, mining, power generation, agriculture, water supplies, and Islamic banking, as well as financing numerous foreign trade operations between Indonesia and other IDB member countries.
Source: AECNews/22 January 2017
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