Increased production driven by the demands of domestic consumers has led to corporate America's capital requirements increasing. This has been largely financed by leasing (particularly equipment leasing), making leasing the tenth largest industry in the world. The recent history of the US leasing industry is touched upon, and the opportunities for Islamic investments in this industry are considered.
The Malaysian government's support for and policies in the Malaysian financial sector have been played an integral role in bringing Islamic banking to where it currently is. Bank Negara Malaysia launch, on 1st March 2001, its Financial Sector Master Plan. This Master Plan has found praise in many quarters. Its target of Islamic Banking gaining 20 per cent of market share by 2010 is seen as achievable. It also provides a realistic time frame for increasing domestic competition and introducing foreign competition. The implications of the Master Plan are discussed.
This is the third article in a four-part series which details how istisna and ijara , two important modes of Islamic finance, may be best utilized in export financing. Various risks are identified, detailed, and ways to avoid them discussed.
Due to the basic principles regarding riba as forbidden and trade as lawful, Islamic finance contracts need to be structured as a trade between the finance provider and the customer. Thus the lawyer has to draft the contract as if it were a straight trade between the bank and the customer, while still bearing in mind that it is primarily a financing contract.
Using the reasoning that in America, residential property is required in good times and bad, ABC International Bank's Islamic Asset Management (IAM), together with Boston Capital, has launched the first Islamic multifamily property development fund in the US. The article discusses the trends in the US real estate market. Given the recent increase in investment funds targeting US real estate assets, realty developers seem to be getting used to Islamic finance structures such as
A seminar on Islamic finance, held in London by Dresdner RCM Global Investors, served to showcase the range of organizations that are interested. A few important issues have arisen from this meeting and the ones preceding it. Islamic financial institutions need to start acting as a unified group to be taken seriously by the Financial Services Authority (FSA), and the people who come in contact with the FSA on the industry's behalf must be professionals.
In the second of a four-part series, John Yip analyses ijara finance, coming to the conclusion that it is not necessarily equivalent to conventional lease financing. He criticizes its classification into operating leasing or financing leasing by AAOIFI standards, and recommends a way to treat it.
An interview with Jassar Al-Jassar, General Manager of Kuwait Finance House (KFH). KFH has been billed as one of the most dynamic Islamic banks in the world, and Jassar Al-Jassar discusses the bank's development and its strategy for the future, which involve e-banking, asset-based financing, and maintaining good growth locally while expanding regionally.
The merging of the assets of Dallah AlBaraka Group's (DBG) nine banking subsidiaries with Kuwait-based The International Investor Group to create the first regional Islamic financial services entity is an important move forward for the field of Islamic Finance. This merger, however, involves risks on both sides. The mechanics of the merger and its potential performance and knock-on effects are discussed.
An interview with Ismail Dadabhoy, Executive Director, Islamic Finance, UBS Warburg in London. He highlights the role, achievements, and challenges of Western financial institutions in Islamic finance. The development of Islamic capital markets, the possibility of structuring an Islamic Repo, and the workings of Islamic finance in UBS are also discussed.