Best Shariah Compliant Index Provider (Global Finance Magazine, US, 2008)
Global Recognition in Islamic Finance for a Finance Institution (Dubai, IIFF 2008)
Best Islamic Index Provider (Euromoney, London, 2008)
Best Islamic Index Provider (Islamic Finance News, Malaysia, 2007)
Best Islamic Index Provider (Terrapin, Singapore)- 2007
Best Individual Contribution to Islamic Finance (Kuala Lumpur Islamic Finance Forum (KLIFF), Malaysia, 2007)
American Muslim Achievement Award, Islamic Center of Southern California, USA (2006)
Sh. Mohmmad Rashid Bin Makhtoum Award for Contribution by Western Institution to Islamic Finance (2006)
Contribution to Islamic Capital Market Development, International Islamic Finance Forum, Singapore, 2006.
Failka Award for Contribution & Development to Islamic Funds (2006)
Deloitte/KLIFF Award for Special Contribution to Islamic Finance (2005)
CERT (Malaysia) Award for Excellence in Islamic Finance (2004)
Sh. Mohmmad Rashid Bin Makhtoum Award for Innovation in Islamic Finance (2003)
Where are we coming from? 1975-1990 Commercial Banking Syndications Islamic Conglomerates 1991-2000 Hard Asset Private Equity Fund Management Islamic Indexes 2001-2010 Structured Sukuk Mega Project Finance Mega Commercial Banks Market exposure: 20m Onset of Islamic Banks (Malaysia, UAE, etc.) Inefficient Command SOEs in Iran and Sudan, and Pakistan Market exposure: 100m Concentrations of Islamic Banks growing in GCC, Malaysia, Pakistan and Bangladesh Market Exposure: 250m Conversions, Islamic Windows & Subsidiaries of Mega Banks, Establishment of significant Islamic Banks in Non-Muslim states Muslim populated states getting interested Syria, Libya, Soviet bloc Timeline 1975-2010 Source: S. Farooq, BIBF
We are moving forward in IF M L R E PE VC Timeline/Products/Returns Activities Risk Reward IF IFI CF CFIs 300 plus years -Petro-liquidity & HNWs -Diversification -Shariah Scholars/research -Stress Tested/Time -Cross Sell CFPs IFPs S
Exclusion of prohibited industries that may be the current high-fliers
Exclusion of financial sector
Exclusion of highly leveraged firms
Exclusion of companies with high non-operating interest income
Bias: Technology, Healthcare & Energy
Quarterly Reviews (turnover)
First Islamic Funds Source: Failaka Jan-93 Saudi Arabia National Commercial Bank AlAhli US Trading Equity Jul-92 Saudi Arabia Al Rajhi Banking & Invest. Al Rajhi Local Share Jun-92 South Africa Futuregrowth AlBaraka Futuregrowth AlBaraka May-91 Singapore Mendaki Holdings Pte. Ltd. Mendaki Growth Fund Jun-86 USA Saturna Capital Amana Income Fund May-71 Malaysia Tabung Amanah Bakti Tabung Amanah Bakti May-68 Malaysia Mara Unit Trust Dana Al-Aiman Inception Location Fund Manager Fund Name
Growth in Assets in Equity Funds Source:Failaka
Growth in the Number of Islamic Equity Funds (excluding Asia) Source:Failaka
As regards Equity Funds Total Number of Islamic Equity Funds: 306 Source: Failaka
Nearly Full Range of Products Source:Failaka Hedge Fund 6-7 nearly there; 2 operational Balanced Easy to duplicate and 17 available Sector Funds 9 available Regional Funds (45 funds dealing in GCC Equities) Small Company (Al-Rajhi Global Small Cap Equity) Single Country (SABB Amanah Saudi Equity) Emerging Market 19 available (BRIC, South Africa, Turkey) European Equity 7 available US Equity 12 available Asian Equity 7 by non-Asian based managers Global Equity 27 available Fund categories
Its all Relative Total Mutual Funds in the World: 56,863 Total Islamic: 550 Total Islamic Equity: 320 (including balanced) Total Socially Responsible (SRI): 201 Source:Failaka
Assets Under Management: In Perspective Total Assets invested in Mutual Funds: US$ 17.8 Trillion Total Assets in SRI Mutual Funds: US$ 179 Billion Total Assets in Islamic Equity Funds: US $ 17.3 Billion (est.) Source:Failaka
What does Sector breakdown mean for an Islamic OIC Index?
Largest sector Eliminated
2-3 Sectors more than 70% of Weighting
One Company Sector
Lack of Technology sector implies:
VC Industry/Angel Investing?
Knowledge Based Economies?
Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q1 2008) 64% 37% 50% 32% Natl bank of Pk (4) Engro Chem Pk (10) Egreg DeMir Ve Celik (5) Turcas Petrol (4) J&S Co (4) Oil/Gas Dev (10) Turkiye Is Bankasi (6) Asya Katlim (6) Oil/Gas Dev (4) Pakistan Petroleum (10) Akbank (8) BIM Birlesik (8) Pak State Oil (5) Pakistan oilfields (10) Turkiye Garanti (9) Turkeye Petrol (22) MCB (15%) Dawood Hercules Chem (10%) Turkcell 9% Egreg DeMir Ve Celik (24%) DJW Pakistan DJIM Pakistan DJW Turkey DJIM Turkey
Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q1 2008) 60% 29% 70% 50% Bank central Asia (6) Indosat (4) Malayan Banking (5) MISC (7) Bakrie Bros (7) Perusahaan Gas (6) Public Bank (5) KL Kepong (8) Astra Intl (7) Astra Intl (12) Bumiputra Comm Ltd (6) DiGi.com (9) Telekomunikasi (14) Telekomunikasi (23) IOI Corp (6) SimeDarby (19) Bumi Resources (16%) Bumi Resources (25%) SimeDarby (7%) IOI Corp (19%) DJ Indonesia DJIM Indonesia DJ Malaysia DJIM Malaysia Titans 25
Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q1 2008) 39% 40% 36% 55% 45% Ren Services (7) Ithmaar Bank (6) Arab Bank (6) Comm Bank of Kuwait (6) Boubyan Petro (5) Oman Telecom (9) NBB (6) MTC (6) NIG (6) Gulf Cble/Elec (6) BM (9) GFH (11) Orascom Telecom (7) MTC (9) Agility (9) Raysut Cement (10) Batelco (12) Orascom Const (7) KFH (9) MTC (9) NBO (10%) Ahli United Bank (22%) Maroc Telecom (10%) NBK (10%) Investment Dar (10%) DJ MSM DJ Bahrain Stock Exchange DJ Arabia Titans 50 DJ Kuwait Titans 50 DJIM Kuwait
What does this sampling of top 5 weighting mean?
Conventional components from OIC
Comparable to non-OIC EM
Financial sector available
Trading in top 20 companies
Shari’ah compliant components from OIC
Largest/liquid sector eliminated
Illiquid Mid-Small caps available
No equity culture (debt screen)
Established OIC v Emerging OIC
Malaysia, Turkey, Pakistan, Egypt, Saudi , UAE, Kuwait, etc.