Category Archives: Mutual funds and Islamic investments

SEDCO’s Shariah funds offer responsible investing

Financial Times: SEDCO’s Shariah funds offer responsible investing

image

Despite myriad column inches, and the urgings of governments from east to west, the Islamic fund industry remains something of a pygmy.

The markets for Islamic banking, insurance and sukuk bonds have all seen solid growth in recent years, but the sharia-compliant fund industry remains tiny, with Ernst & Young estimating it at $58bn, as of 2010, a fraction of the $300bn sukuk sector.

The sharia fund market, which is heavily skewed towards equities, was not helped by its emergence coinciding with the global financial crisis, damaging confidence at an inopportune time.

However, to Hasan Al Jabri, chief executive of Saudi Arabia’s Sedco Capital, the resultant “chronic” lack of high-quality sharia-compliant products represents both a challenge and an opportunity.

“Islamic investors have traditionally found it difficult to access the same investment opportunities as non-Islamic investors. The growth of sharia-compliant investment has been stunted by a reputation for a lack of diversity, poor performance and high fees,” says Mr Al Jabri, who also cites the lack of “credibility” of houses that sell both sharia and non-sharia products and a view in some quarters that sharia funds are a relatively unimportant niche.

“For some of the western banks it’s not really meaningful, it’s not worth the attention. When we grow to $5bn, it’s very meaningful for us,” he says.

Since May 2012, Sedco Capital has “addressed these challenges head on”, building what is believed to be the largest sharia-compliant fund platform in Luxembourg. Its five vehicles, covering passive US equities, fundamental US equities, global dividend stocks, emerging market equities and global real estate investment trusts, hold $900m of assets.

Although this number is small in the great scheme of things, Mr Al Jabri points out that Sedco’s sharia-compliant US Equities Passive fund, with assets of $360m, dwarfs the $20m held by the iShares MSCI USA Islamic exchange traded fund, and has lower fees, 40 basis points against 50bp.

“I’m not aware of any single entity that has the range of sharia products we do. Certainly in Luxembourg we are the largest platform and the most diverse,” says Mr Al Jabri.

Jeddah-based Sedco is currently launching two more vehicles with one, the Global Market Sentiment fund, designed to switch between equities and Islamic time deposits, or murabaha, as the manager sees fit.

“We are very excited about it,” says Mr Al Jabri. “It’s a tactical fund. The economic cycles have become shorter, the markets move very fast. We see a bull market then a bear market then a bull market, it’s happening every two to three months.

“Therefore we need a tactical component because we cannot short equities in sharia-compliant funds. It will look at the fundamentals of the market. Where the market is unduly pessimistic, we go into the market. When it’s too optimistic, we put it in murabaha. We are telling the manager, when it doesn’t make sense, have the courage to pull the money out.”

The Market Sentiment fund is being launched alongside a fixed income equivalent, and each vehicle has been seeded with $150m from Sedco’s wealth management clients.

The plan is to launch around eight to 10 funds during 2013, raising assets on the Luxembourg platform to $1.6bn. Asia-Pacific and emerging market equity funds are on the drawing board, alongside a US real estate fund and private equity funds covering the US and Brazil.

All the funds are outsourced to external managers with, for instance, State Street Global Advisors managing the US Equities Passive fund and Credit Suisse contracted to run the two latest offerings.

Sedco has a series of Saudi feeder funds to channel money from its home market into the Luxembourg platform, but Mr Al Jabri says the bulk of the money is coming from elsewhere, a trend he expects to become more pronounced, even though Sedco is targeting only “sophisticated” investors.

“Several private banks have approached us. They want to do their due diligence and then they will start very actively marketing it to their own private clients,” says Mr Al Jabri, who says Sedco has also had “preliminary discussions” with non-Muslim investors.

Indeed, Mr Al Jabri believes sharia investment could find favour with a growing number of western investors.

“We don’t do alcohol, arms, the financial industry [because of leverage], pork,” he says. “We feel strongly about responsible investing. I deserve to make money only when I’m creating value for the economy, I’m helping to create the jobs. This is a very important factor for us and is something that the world really needs.”

This approach is perhaps more noticeable in Sedco’s private equity operations, where it already has some non-Muslim investors.

The company started investing in both property and private equity in the 1970s, when it was formed as the family office of Sheikh Salem Bin Mahfouz, the founder of Saudi Arabia’s National Commercial Bank.

However, restrictions on interest payments and debt mandated by a sharia-compliant approach means Sedco cannot participate in leveraged or management buyouts, although it is happy to invest in indebted companies as long as their debt is no more than a third of their market capitalisation.

This approach forces Sedco to concentrate on targeting growth companies via venture capital, something a number of established private equity groups are happy to accommodate by setting up parallel sharia-compliant funds alongside their mainstream offerings.

“The portfolio will be 20-30 per cent different [from the mainstream fund],” says Mr Al Jabri, who says this approach has benefited investors in both private and public equity markets.

“We were out of financial institutions and insurance companies because their leverage was too high. That has helped our performance in the past few years, although it can work against us. In 2012 we missed out on opportunities.

“Excessive leverage can drive companies into difficulties. I think that’s the main difference; when markets go down they are the most drastically affected.”

Source: http://www.ft.com/intl/cms/s/0/aab6dd18-79e1-11e2-9dad-00144feabdc0.html

Pakistan Mutual Funds Push for More Sukuk Issues to Invest Cash

Pakistan Mutual Funds Push for More Sukuk Issues to Invest Cash

Fund managers in Pakistan are urging the government to increase offerings of Islamic debt, saying a 13-fold rise in sukuk sales this year isn’t enough for them to invest inflows of cash.

The central bank plans to auction 45 billion rupees ($525 million) of three-year sukuk in the domestic market on March 1 and another 55 billion rupees in the three months ending June 30. The sales will take the total for the fiscal year to 189 billion rupees, compared with 14.4 billion rupees in the previous 12 months.

Pakistan’s Islamic banking assets climbed an average 30 percent annually in the past four years to 411 billion rupees as of June 2010, 6 percent of the financial industry’s total, according to a central bank estimate in October. Pakistan aims to double that share to 12 percent by 2012 and plans to issue two more Shariah banking licenses that will take the total to seven, the monetary authority said in October.

“The government has relied too much on the conventional debt market without realizing how much liquidity is in the Shariah-compliant industry,” Sajjad Anwar, who helps manage the equivalent of $187 million at NBP Fullerton Asset Management Ltd., a unit of the nation’s biggest lender National Bank of Pakistan, said in a Jan. 11 interview from Karachi. “Islamic funds and banks are just waiting.”

Banking Licenses

Pakistan needs to finance a budget deficit that may reach 6 percent of gross domestic product, or 1 trillion rupees this fiscal year, exceeding the government’s target of 4 percent, according to a report from the State Bank of Pakistan on Oct. 25. The shortfall was 6.3 percent last year, according to data on the Finance Ministry’s website.

The yield on the three-year debt will rise to 13.89 percent from 13.39 percent at the prior offering on Dec. 13 as the central bank may increase interest rates to temper inflation, said Karachi-based Abdullah Ahmed, treasurer at Meezan Bank Ltd., the nation’s biggest Shariah-compliant lender.

“In an environment when everyone is expecting a hike in interest rates, the demand for such paper will remain high,” Ahmed said in an interview on Jan. 12. “Islamic banks are desperate to deploy their funds.”

Inflation stayed above 15 percent for a fourth month in December after unprecedented floods in August destroyed roads and damaged crops worth $3.3 billion.

Inflation to Slow

“The inflation rate will start falling from next fiscal year to average 13 percent as the government aims to reduce borrowing and impose additional tax measures,” Mohammed Sohail, chief executive officer at Topline Securities Ltd., said in an interview yesterday from Karachi.

The State Bank of Pakistan increased its discount rate by half a percentage point to 14 percent on Nov. 29, the third policy tightening since July. The central bank has raised borrowing costs from a record low 7.5 percent in 2005. Policy makers will increase the rate by 50 basis points to 14.5 percent at the Jan. 29 meeting, according to Meezan Bank’s Ahmed, who said he will buy sukuk at the next auction.

Pakistan’s central bank uses the yield on its six-month non-Islamic treasury bills as a benchmark for pricing debt. The yield rose to 13.55 percent at a sale on Jan. 12, nine basis points more than the previous offering. The rate was 12.05 percent a year ago, Bloomberg data shows.

Global sales of sukuk, which pay asset returns to comply with the religion’s ban on interest, fell 15 percent to $17.1 billion in 2010, according to data compiled by Bloomberg. Issuance reached a record $31 billion in 2007.

Islamic Debt Returns

Shariah-compliant bonds returned 12.8 percent last year, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows. Debt in developing markets gained 12.2 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.

The difference between the average yield for emerging- market sukuk and the London interbank offered rate shrank eight basis points this month to 281, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. Average yields dropped 13 basis points to 4.61 percent.

The yield on Malaysia’s 3.928 percent sukuk maturing in June 2015 rose two basis points to 2.8 percent today, according to prices from Royal Bank of Scotland Group. The extra yield investors demand to hold Dubai’s government sukuk rather than Malaysia’s narrowed one basis point to 330 today, Bloomberg data show.

Government Debt Sale

The government sold 37.2 billion rupees of Islamic securities on Dec. 13 and got orders for 57.7 billion rupees. At the previous sale on Nov. 8, it raised 51.8 billion rupees after receiving offers of 64.7 billion rupees. Pakistan had local- currency debt of 5.35 trillion rupees outstanding, including 94 billion rupees of sukuk as of November 2010, according to the central bank’s website.

Pakistan is attracting investors even as the country battles an eight-year insurgency with militants in its border region with Afghanistan. The U.S., a major financial donor, is pushing President Asif Ali Zardari to intensify that crackdown. A policeman assassinated secular politician Salman Taseer on Jan. 4 for opposing an Islamic blasphemy law.

Albaraka Banking Group BSC, Bahrain’s biggest publicly traded Islamic lender, boosted its branch network to 90 after acquiring Pakistan’s Emirates Global Islamic Bank Ltd. in 2010. Meezan Bank, controlled by Kuwait’s Noor Financial Investment Co., plans to open 225 new outlets in the next four years.

The central bank predicts the economy will expand 2.5 percent this fiscal year, faster than last year’s 1.2 percent. The Karachi Stock Exchange KSE100 share index reached a 2 1/2- year high today. The gauge rallied 28 percent last year after soaring 60 percent in 2009.

“For Islamic banks, sukuk will remain attractive because the sovereign notes offer the least risk and high returns,” Pervez Said, chief executive officer of Dawood Islamic Bank, 35 percent owned by Bahrain’s Unicorn Investment Bank BSC., said in an interview yesterday from Karachi. “Political and security problems have always been associated with Pakistan. The issue is where do we invest?”

Source: http://www.bloomberg.com/news/2011-01-17/pakistan-funds-push-for-sukuk-to-invest-cash-islamic-finance.html

To contact the reporter on this story: Khalid Qayum in Singapore kqayum@bloomberg.net; Haris Anwar in Islamabad at Hanwar2@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

India’s first Shariah compliant stock index could boost Islamic mutual fund industry

India’s first Shariah compliant stock index could boost Islamic mutual fund industry

The Bombay Stock Exchange (BSE), Asia’s oldest bourse, launched its first Sharia-compliant stock index in December in a move that could boost offerings of exchange traded funds (ETFs) and mutual funds to tap into India’s fast-expanding economy.

Islamic finance in India, home to the world’s second-largest Muslim population after Indonesia, is still in its infancy and the new benchmark should help channel socially-conscious investor savings of more than $1 trillion in the coming years, including from the cash-rich Gulf.

The BSE TASIS Sharia 50 Index includes blue chips like energy conglomerate Reliance Industries, top software services exporter Tata Consultancy Services, leading mobile phone operator Bharti Airtel, carmaker Maruti Suzuki and engineering and construction giant Larsen & Toubro.

There has been a Sharia-based ETF in operation since 2007 in India, and also many Islamic-compliant brokerage houses like Parsoli and Idafa, but this is yet to pick up in a big way.

“The BSE has the largest number of Sharia-compliant companies in the world, more than the whole of the Middle East and Pakistan,” said Sharique Nisar, director of Taqwaa Advisory and Sharia Investment Solutions or TASIS which corroborated with the BSE on the index.

Missed opportunity

If the Sharia 50 had been launched in early 2008, it would have given better returns than the top-30 Sensex and the wider BSE-500 index, according to the BSE.

“The Sharia 50 has outperformed the Sensex by nearly 25 per cent and the BSE 500 by over 30 per cent over our back-test horizon (beginning 1-1-2008),” the exchange said. “Over this period, annualised volatility for the Sharia 50 was also less than both Sensex and the BSE 500 by nearly five per centage points.”

The 30-share Sensex, India’s mostly widely tracked index, was one of the world’s best performers in 2010, rising 17.4 per cent. India’s $1.3 trillion economy, Asia’s third-largest after China and Japan, is expanding at around 9 per cent annually and the government aims to push growth to double digits in the years ahead.

With about three-quarters of India’s 1.2 billion people below the age of 25 years, the country is destined to reap a demographic dividend as the productive younger population boosts consumer spending and pays for massive investment in large infrastructure projects such as highways, power, airports, flyovers and townships.

“The long-term outlook for the Indian economy is very bullish and the Sharia-compliant index will be a huge booster to attract a new class of investors,” said Biju Dominic, who advises retail clients in Mumbai.

He said pension funds from Saudi Arabia to the UAE, and from Malaysia to Indonesia, that have strict religious rules for investment could use the index to pour funds into socially responsible sectors in a region which is growing rapidly.

The BSE’s Sharia 50 comes four years after the Standard & Poor’s launched similar indices elsewhere, spawning a series of ETFs and mutual funds.

S&P had also partnered the National Stock Exchange, India’s biggest bourse and the main market for derivatives, to launch S&P CNX Nifty Sharia and S&P CNX 500 Sharia index. However, only one ETF — the Sharia BeES by Benchmark Mutual Fund — based on the CNX Nifty Sharia has been launched so far.

New investor class

Still, with India’s pace of economic expansion expected to overtake China’s growth rate in the coming years global investors would increasingly look to grab a slice of the market With more Sharia-compliant benchmarks and greater awareness, the prospect for attracting a new class of investors is upbeat.

Madhu Kannan, managing director and chief executive of the BSE, said the Sharia 50 index could give Islamic and other socially responsible investors from the Gulf, Europe and South-east Asia another means to access the Indian market.

Foreign portfolio investment in Indian companies has exceeded $1 trillion since the market was opened up in 1993, and there is another $18 billion in debt instruments.

Domestic investors, especially from the Muslim community, will also find the index handy.

“The creation of the index will help promote financial inclusion of the Muslim population in India and attract investment flows from international funds that must adhere to Sharia norms,” the BSE said.

Oil and gas companies account for almost 30 per cent of the market capitalization stocks in the Sharia 50, followed by capital goods at 19.4 per cent and information technologies at nearly 12 per cent.

The BSE, which started operations in 1875, says the Sharia 50 is the first Indian index to cap the weighting of stocks at eight per cent, which increases diversification and makes related products more attractive to global investors.

Some Sharia-compliant schemes in India

Ambit QInvest
Ambit Capital in collaboration with QInvest, Qatar’s leading investment bank, launched a $150 million open-ended Ambit QInvest India Fund in 2010, which has been touted as the largest Sharia-compliant India fund.

“The fund’s performance in the last three months since inception is 10.4 per cent,” QInvest’s Chief Executive Shahzad Shahbaz said in December. “The Indian equity market provides investors with a highly attractive opportunity to invest in a diversified range of Sharia-compliant equities. The market capitalisation of Sharia-compliant companies within the Nifty stock market index is nearly 60 per cent.”

QInvest had acquired a 25 per cent holding in Ambit Corporate Finance last February for Rs2.5 billion, and recently bought 28 per cent stake in Asian Business Exhibition and Conferences, India’s leading exhibitions and conferences organiser.

Sharia BeES
Sharia BeES, an exchange traded fund, was launched by Benchmark Mutual Fund more than two years ago and mimics the S&P CNX Nifty Sharia Index, which comprises companies in energy, software services, automobiles, engineering, metals, health care, construction, telecom and consumer goods. The passively-managed fund has assets under management of Rs9 million, with annual returns of 10.4 per cent. Minimum investment is Rs10,000.

Taurus Ethical
Taurus Mutual Fund collected about Rs50 million for its Sharia-compliant Taurus Ethical Fund when it was launched in February 2009. It invests in the companies that are part of the S&P CNX 500, with a preference to more mid-cap firms. Being an actively managed diversified fund, it has outperformed the benchmark with annual returns of 23.8 per cent. It has assets worth Rs254 million.

Brokerages
Parsoli Corporation is one of the few Islamic finance firms in India to be involved in equity brokerage and Sharia compliant investment activities. Others include Hidaaya Consultancy Services, Bearys Amanah and Idafa Investments.

Source: http://gulfnews.com/business/markets/india-woos-islamic-funds-1.746388

Istanbul Stock Exchange launches Islamic index

Istanbul Stock Exchange launches Islamic index

 

 

 

 

 

 

 

 

 

In an effort to tap the growing area of Islamic banking, the Istanbul Stock Exchange launches a participation index in a ceremony. The index, comprised of 30 companies, includes giants such as Türk Telekom, BİM, Enka İnşaat, Ford Otosan and Petkim. Hüseyin Erkan, chairman of the bourse, says the exchange may also establish separate indexes for groups such as holding companies

The Istanbul Stock Exchange, or ISE, launched a participation index, made up of equities that adhere to the principles of Islamic lending, at a ceremony Thursday.

The main reason for the creation of the participation index is to offer a special Islamic and domestic index “suited to the customer profile of participation banks,” according to exchange officials who spoke at the ceremony.

Pointing to the rapid and steady growth of Islamic banking in Turkey since 2004, Fahrettin Yahşi, chairman of Turkey’s Participation Banks Association, or TKBB, said the participation index will be an important service to provide standardization in the sector. Yahşi is also the general manager of Albaraka Türk, majority-owned by the Albaraka Banking Group.

The new index was established according to the “customer profile” of participation banks, Yahşi said, implying an approach to financial affairs that adheres to Islamic rules. “Such a service has never been offered before in Turkey,” he said.

The index includes companies that have financial operations on a non-interest basis, as Islam forbids interest. It also has incorporated various companies that do not produce alcoholic drinks and are not involved in gambling, pork meat, tobacco products, tourism,entertainment, media, advertisements, weapons, interest on gold and foreign currency trade.

Growing interest

The participation index has become a necessity as the volume of interest-free investments and the purchase and sale of securities compatible with participation banking principles have surged, according to Avşar Sungurlu, deputy director of Bizim Securities.

Companies that become part of the index are also over a certain size, according to Sungurlu.

Bizim Securities has taken the responsibility for updating the index, adding or taking out companies if it becomes necessary.

ISE Chairman Hüseyin Erkan said the bourse might also establish separate indexes for groups such as holding companies. “After this index, an Exchange Investment Fund will be established,” he said.

Birleşik Mağazalar, or BİM, a discount retail chain, is leading the new index, which comprises 30 companies. Other companies in the index include Türk Telekom, Enka İnşaat, Bank Asya, Emlak Konut Real Estate Investment Trust, Ford Otosan, Petkim, Koza Altın, Aygaz, Trakya Cam, Çimsa, Sinpaş REIT, Doğuş Otomotiv, Gübre Fabrikaları, Albaraka Türk, Türk Traktör, Bagfaş, Mardin Çimento, Akçansa, Adana Çimento and Pınar Süt.

In regards to sectors, the trade sector makes up 21.3 percent of the index, followed by communications with 16.6 percent.

“We aim to be a domestic participation index. But at the same time we want foreign investors to benefit from this index,” Sungurlu said.

The index will be traded on the stock exchange under the KATLM ticker.

Bekir Boydak, board chairman of Bizim Securities, Ufuk Uyan, the general manager of Kuveyt Türk, and Cemil Özdemir, the general manager of Bank Asya, signed the protocol on the participation index during the ceremony.

Source: http://www.hurriyetdailynews.com/n.php?n=istanbul-bourse-launches-participation-index-2011-01-06

Bombay Stock Exchange launches Islamic index

Bombay Stock Exchange launches Islamic index

Stock Exchange

The Bombay Stock Exchange (BSE) in the Indian city of Mumbai has launched a new index which consists of companies that meet the Islamic legal code.

The Tasis Shariah 50 was formed using guidelines from an Indian Shariah advisory board.

Studies have found that most Muslims in India are excluded from the country’s formal financial sector.

That is because Islamic law does not allow investment in companies that sell goods like alcohol, tobacco or weapons.

Neither does it allow investment in companies that derive significant profit from interest.

The index is intended to be the basis for other Shariah-compliant financial products.

‘Come and invest’

BSE Managing Director and Chief Executive Madhu Kannan said that the new index would attract Islamic and other "socially responsible" investors both in India and overseas.

"This index will create increased awareness of financial investments among the masses and help enhance financial inclusion," he said in a statement.

Companies included in the index have been screened by Tasis, which is based in Mumbai and whose board members include Islamic scholars and legal experts.

"Before anyone can attract investors, we need to put in place institutional infrastructure, and having an index to track Shariah-compliant stock is important," MH Khatkhatay, senior adviser to Tasis, told the Reuters news agency.

"If you have an ETF (exchange traded fund), for example, you need an index, or if overseas investors want to invest in Shariah index in India, this is an invitation for people to come and invest."

Tasis said the index would "unlock the potential for Sharia investments in India".

"The BSE has the largest number of listed Sharia-compliant stocks in the world," said Shariq Nisar, director of research and operations at Tasis.

"All Muslim countries of the Middle East and Pakistan put together do not have as many listed Sharia-compliant stocks as are available on the BSE."

Stocks will be reviewed every month to ensure they continue to meet the criteria – any which do not will be removed, officials say.

Source: http://www.bbc.co.uk/news/world-south-asia-12083190

Dubai’s first Shariah compliant REIT launched

Dubai’s first Shariah compliant REIT launched

cottage

Dubai Islamic Bank (DIB) launched the emirate’s first Shariah-compliant real estate investment trust to aid in the recovery of the country’s battered real estate sector, top executives said on Tuesday.

Emirates REIT, a joint venture between DIB and French property firm Eiffel Management, looks to attract Shariah-compliant property such as office buildings, warehouses, schools and car parks and convert the rental income into dividends for investors, said Adnan Chilwan, chief of retail banking at DIB.

Around 80 per cent of the REIT’s annual profit will be distributed to shareholders as a dividend.

The initiative was a move by DIB to help fuel growth in the UAE’s struggling real estate market by allowing investors to take income-producing real estate assets from their balance sheets and receive tradeable shares in the REIT, Chilwan said.

"We are cautiously optimistic but, of course, much depends on the acceptance in the market," he said.

Mark Inch, chairman of Eiffel Management, said the firms expect the REIT to generate 5 to 10 per cent in returns over time and the companies expect the REIT to come to market "in the near future."

DIB provided the seed financing by moving seven of its own properties throughout the UAE into the REIT, executives said. Properties will be based in the Dubai International Financial Center.

DIB’s chief executive Abdulla Ali Al-Hamli said the REIT will initially look to draw capital from the local market but plans to expand to attracts funds throughout the region and then globally.

Executives said that 51 per cent of investors must be from the Gulf Cooperation Council but all investors would have access to non-freehold real estate invested in the REIT.

In September, Dubai Islamic Bank raised its stake in troubled Islamic lender Tamweel to 57.33 per cent, effectively rendering the mortgage lender a subsidiary of the bank, in a move that was expected to help revive lending in Dubai’s property market.

Source: http://www.emirates247.com/property/real-estate/dubai-s-first-islamic-reit-launched-2010-11-24-1.320578

QInvest, Ambit launch Shariah-compliant Indian fund

QInvest, Ambit launch Shariah-compliant Indian fund

Gateway_of_India

As a continued sign of its clients’ appetite, QInvest, Qatar’s leading Investment Bank, in collaboration with India’s premier financial services partner, Ambit, announced the launch of the Ambit QInvest India Fund, an open ended Shariah-compliant Indian Equities Fund.

The fund is the region’s first and India’s largest Shariah-compliant equity fund with an investment strategy that will combine dynamic equity allocation to generate returns.

The Ambit QInvest India Fund further strengthens QInvest’s position as the leading investment bank in developing Shariah-compliant innovative solutions to satisfy its Qatari and regional clients’ appetite towards investing in growth markets.

Leveraging Ambit’s expertise and consistent track record, the fund offers an attractive entry point for investors to leverage the potential for long term price appreciation underpinned by strong growth drivers in the Indian market. QInvest conviction in this project and the Indian market is further demonstrated by seeding capital into the product.

Commenting on this launch, QInvest’s CEO, Shahzad Shahbaz, said: “The Indian equity market provides investors with a highly attractive opportunity to invest in a diversified range of Shariah-compliant equities. The market capitalisation of Shariah-compliant companies within the Nifty, stock market index, is nearly 60 percent”.

“The Fund’s performance in the last three months, since inception, is 10.4 percent” Shahbaz added.

QInvest and Ambit recently organised a professional workshop entitled “Invest in India” at the Four Seasons hotel in Doha, Qatar. Attended by a group of senior bankers and institutional investors, the workshop addressed the current status of the Indian equity market that offers distinct advantages for investors seeking to leverage the fast growing Indian market and an opportunity to diversify their portfolios.

Over 6,000 listed companies boasting in excess of $1.3 trillion market capitalisation has enabled the Indian stock market to be ranked as one of the best performance among emerging markets.  And while China has outperformed on economic growth, India has provided consistent returns to stock market investors in the last 5 years in overall terms.

“Key Shariah-compliant growth sectors in the Indian economy are likely to witness significant activity including power, roads, automotive, pharmaceutical and consumer staple and non-staple products.” Said Andrew Holland, Equities CEO at India’s Ambit Capital Pvt Ltd.

With many global pension funds increasing their India weightage, a re-rating of the market is probably warranted. “We see the Sensex, Indian stock market index, at 23,000 by March 2011,” added Holland.

“The Indian economy should see robust growth and given that valuations remain attractive, investors are looking to reallocate capital away from more developed equity markets, where their confidence is lower”.

To further strengthen its access to the Indian market, QInvest made an important strategic investment by taking a stake of 25 percent in India’s Investment Bank, Ambit Corporate Finance Pvt Ltd, giving clients access to this high growth market in which many investors have expressed keen interest.

Just recently, QInvest has acquired a 28 percent stake in Asian Business Exhibition & Conferences Ltd (ABECL), India’s leading exhibitions and conferences organizer, to further expand ABECL’s operations within India and internationally.

Source: http://www.thepeninsulaqatar.com/business-views/135058-qinvest-ambit-launch-shariah-compliant-indian-fund.html