Tag Archives: asian
India Shariah Market Tested With Property Funds
Taqwaa Advisory is setting up a Rs. 250 crore real estate fund to give Indian muslims a Shariah investment option Liau Y-Sing Yudith Ho A file photo of BSE. India has two Shariah equity funds and BSE introduced a new Islamic share index on 2 May. Photo: Hemant Mishra/Mint Taqwaa Advisory and Shariah Investment Solutions Pvt. Ltd, a Mumbai-based consultancy, is setting up the Rs. 250 crore fund on behalf of a company backed by the Kerala government, director Shariq Nisar said in an interview on Wednesday. Secura Investment Management (India) Pvt. Ltd manages the country’s only other such real estate vehicle. India has two Shariah equity funds and BSE Ltd, the stock exchange operator, introduced a new Islamic share index on 2 May. “Islamic finance is in a nascent stage in India and definitely any new product will create more awareness and opportunity,” Taqwaa’s Nisar said. “There’s a lack of awareness and interest, which will take some time to be removed.” In 2008, a 13-member panel of experts led by Raghuram Rajan , a former chief economist at the International Monetary Fund and now the top adviser in India’s finance ministry, recommended that the country allow banking that complies with Islam’s ban on interest. The government did not take any action, and central bank governor D. Subbarao said this month that Shariah-compliant banking is inconsistent with the nation’s laws. Political barrier India’s 10-year sovereign bonds yield 7.15%, well ahead of 5.97% in Indonesia, the next highest in the region, data compiled by Bloomberg show. “The challenge is that every time India tries to offer Islamic banking, the tendency is to politicize this product,” Raj Mohamad, managing director at consulting company Five Pillars Pte, said in an interview from Singapore on Wednesday. “India should look at non-traditional Islamic finance markets and see how they have done it.” Stock funds Internationally, an increasing amount of Shariah-compliant financial assets has buoyed demand for sukuk, with worldwide sales reaching a record $46.5 billion last year. Issuance has risen 7% so far in 2013 to $18 billion, data compiled by Bloomberg show. The average yield on Islamic debt rose 10 basis points, or 0.1 percentage point, to 3.38% on Wednesday, the HSBC/Nasdaq Dubai US Dollar Sukuk Index shows. Borrowing costs have climbed 57 basis points this year, after reaching a record low of 2.67% in January. The yield premium over the London interbank offered rate, or Libor, widened five basis points to 181. Some 13% of India’s 1.2 billion people are Muslim, according to the CIA World Factbook, the third-biggest population behind Indonesia and Pakistan. Those two countries have 209.6 trillion rupiah and 837 billion Pakistani rupees of Islamic banking assets, the latest central bank data show. In Malaysia, a global pioneer in Shariah-compliant finance, holdings total 399 billion ringgit. Bloomberg Continue reading
EU Carbon Price Crisis Spreads To Australia
Last updated on 10 May 2013, 7:33 am By John Parnell The crisis in the European carbon market has spilled over to Australia with the government forced to postpone a promised tax cut. Australia placed a charge of A$24 per tonne on the largest emitting industrial sectors with its powerful mining industry hit hard. A planned increase in the tax free income tax threshold that was linked to money raised by the carbon tax has now been postponed. “If the carbon price forecast is revised down, as it will be in the budget, then there’s no case for the additional measures that we had put in place,” Climate Change Minister Greg Combet confirmed on Wednesday. Opposition leader Tony Abbott, who has pledged to scrap the tax and the country’s climate commission should he win September’s election, said it was further evidence that Julia Gillard’s government could not be trusted. “This is a government that talks about living in the Asian century, yet they gave economic policy-making in Australia over to the Europeans,” said Abbott. The struggling EU Emissions Trading System (ETS) will be partially linked to the Australian market in 2015 and fully linked in 2018. A recent vote by the European Parliament against reforms of the struggling ETS raised fears that market faced a period of stagnation. Asked by RTCC if Australia was reviewing the plans for the link-up, a spokesperson for Minister Combet said: “Australia remains committed to the link with the European Union carbon market.” They added that carbon markets including the EU link-up were part of the process of building momentum for the UN’s 2015 global climate treaty, due to come into force in 2020. A combination of reduced economic output as a result of the recession and the absence of more ambitious EU climate targets mean the cap has been placed too high and the demand to trade emission permits is too low. In April the proposal to withhold 900m credits from the next phase of the system to this imbalance in supply and demand, was voted down 334-315. A second vote on a tweaked version of the reforms will take place in the first week of July. Continue reading
Franklin Templeton Launches Asian Dividend Fund For Mobius
03 May 2013 | 11:51 Dan Jones Franklin Templeton has launched an Asian Dividend fund for head of emerging markets Mark Mobius as it seeks to tap into investors’ growing desire to diversify income streams. The Templeton Asian Dividend fund, run by Mobius ( pictured ) and Tom Wu, will focus on companies offering attractive dividend yields, or those that have the potential to produce such yields over time. Investing in countries across Asia, it seeks to generate a higher income yield than its benchmark, the MSCI All Country Asia-Pacific ex Japan Total Return index. The investment universe includes countries such as Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam. Mobius, who runs a wide range of funds at the group including Templeton Emerging Markets and Templeton Frontier Markets, will work with Wu to select stocks for the portfolio, but both will be supported by a large team of analysts. Launched as a Luxembourg SICAV, the fund will be registered in the UK, subject to FCA approval. “Dividend yields are an important source of income, as investors are finding it increasingly difficult to source meaningful yield in fixed income without higher specific risk,” said Mobius. He added the rising number of payouts in Asia make it an attractive area for income-hungry investors. Asian equity income funds have seen a surge in popularity among UK retail investors in recent years, with the likes of Newton, Invesco Perpetual and Liontrust all unveiling offerings in the space. Newton Asian Income, run by Jason Pidcock, has seen assets surge from £1.2bn at the end of 2011 to a current level of £3.9bn as investor demand for yield continues apace. more: http://www.investmen…s#ixzz2SJQecoz6 Investment Week – News and analysis for investment advisors and wealth managers. Claim your free subscription today. Continue reading
