Peerless potential: New adventures in alternative finance

Rapids • Deals • News • Takaful • Asset Management • Ratings • Moves
2nd September 2015 (Volume 12 Issue 35)
Innovation is a buzzword in our industry Innovation is a buzzword in our industry – but while everyone is always looking for the next big thing, it can be easier (and safer) to stick to tried and tested methods. What happens when the old and the new combine, however, to create new pathways for progress? This week, our cover story takes a look at a new trend that is doing exactly that – with new alternative financing methods that are cutting a swathe through the traditional avenues for lending, and even forcing financial institutions themselves to reevaluate their offerings and consider the possibility of other options. Peer-to-peer finance, the latest evolution of the crowdfunding juggernaut, has the potential to revolutionize the global financial marketplace – read on to discover just how Islamic finance is getting in on the party. Our IFN reports this week take you on a journey from Pakistan's unified stock exchange to what could be 2015's largest Sukuk offering, while our IFN Correspondents bring you news on Canada and Brunei. Our special reports feature Islamic finance in Mauritania and Europe, while our features look at asset management, Takaful and pawnbroking in Sri Lanka. We also have a new column from respected industry expert Dr Ken Baldwin, 'The Bare Truth', in which he takes an unflinching look at the real issues facing the industry today. We have a wealth of material for you this week, covering all angles and aspects of the market from old to new, reaching across the globe and back. I hope that you derive as much pleasure from its consumption as we do from its provision! Cover Story Peerless potential: New adventures in alternative finance Crowdfunding has been a hot topic for IFN over the past year, and we’ve worked hard to promote the exciting prospects that the sector could offer the Islamic finance industry. Now, however, the market is evolving yet further — with new developments in peer-to-peer (P2P) platforms and innovations in product offerings opening up a whole new horizon of opportunity. LAUREN MCAUGHTRY looks at the latest adventures in alternative finance. Column The bare truth It’s more than 20 years since I was first introduced to Islamic finance. Having only worked for conventional banks up until then, I was curious to know about Islamic finance and whether Islamic banking in particular was really any different from conventional banking. IFN Reports • Pakistan moving toward single national stock exchange • STMB diversifies distribution channel to bolster Takaful penetration rate • 2015’s largest Sukuk in the works • Peer-to-peer platform Beehive gains landmark Shariah certification • Fund Focus: Rasmala Leasing Fund 2 • Sovereign Sukuk: Indonesia doubles its volumes • IFN Weekly Poll: Will India's need for infrastructure funding finally open the doors to Islamic finance? IFN Country Correspondents • Opportunity to create an Islamic bank in Canada • Major boost for Islamic finance in Brunei • Slow turn of events for Islamic finance in Russia • Islamic finance gaining ground in Kazakhstan • Integration of stock exchanges in Pakistan IFN Country Analysis • Kazakhstan and Central Asia: Accelerated rise IFN Sector Analysis • Takaful and re-Takaful: Gradual progression Case Study Al Meezan’s new fund: Access to Pakistan’s equity markets Al Meezan Investment Management (Al Meezan) earlier this month launched a new fund, the Meezan Asset Allocation Plan-I (MAAP-I). An asset allocation plan for investors seeking to benefit from the equity market, the fund is an actively managed investment portfolio with diversification and an initial term of two years. Exclusively speaking to Mohammad Shoaib, CEO of Al Meezan, NABILAH ANNUAR gets acquainted with the fund. Special Reports Islamic finance in Mauritania: Rapid growth and challenges The start of Islamic finance in Mauritania goes back to the last century when Al Baraka Bank was given a license by the central bank of Mauritania (BCM) to operate as an Islamic bank. The venture capital of Al Baraka Bank reached MRO500 million (US$1.57 million), with half of its initial capital subscribed by Al Baraka’s Saudi Arabian unit, while 10% of the capital was subscribed by the BCM and the remaining 40% by Mauritanian businessmen. Islamic finance in Europe: Which way to go? Earlier in the summer, the writer had an opportunity to attend the IFN Islamic Finance Forum Europe in Luxembourg. The forum brought together industry experts from all over the world to discuss the region’s rising Islamic finance market. Features Shariah compliant pawnbroking system in Sri Lanka Traditional pawnbroking seems a more attractive banking activity than lending. It is common throughout South Asia as well as in East Asia to pawn gold jewelry. The desire of most Asians to hold some of their assets as gold jewelry may be the major reason for the pawnbroking industry’s success. IMRUZ KAMIL explores. A quick glance at the case for Takaful windows The Takaful world has reached a critical stage on its growth trajectory and therefore DAWUD ABDUS-SABOOR opines that it is necessary to take a cursory assessment of the case for Takaful windows in looking toward the future of the industry. The world of Islamic asset management Managing financial assets Islamically compares to its conventional counterpart, with further additional constraints that comply with the ethical standards of Islamic finance. Shariah compliant asset management is net of derivatives and toxic instruments, hence its relatively better performance during the subprime crisis.  CONTACTS Editorial: Sasikala Thiagaraja Direct Line: +603 2162 7800 ext 34 Finance: Faizah Hassan Direct Line: +603 2162 7800 ext 26 Sales: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Steve Stubbs Direct Line: +603 2162 7800 ext 55 Subscriptions: Dubai: Geraldine Chan Direct Line: +971 4 427 3628 Kuala Lumpur: Siti Amilia Amir Amzah Direct Line: +603 2162 7800 ext 27