Public Security chief launches digital vehicle plate wallet service    'Action is in our nature': 4th Saudi Green Initiative Forum to be held at COP16    Pop hit APT too distracting for South Korea's exam-stressed students    Saudi Arabia's inflation rate hits 1.9% in October, the highest in 14 months    Mohammed Al-Habib Real Estate Co. sets Guinness World Record with largest continuous concrete pour    PIF completes largest-ever accelerated bookbuild offering in MENA region    Saudi Arabia signs renewable energy program with Azerbaijan, Kazakhstan and Uzbekistan at COP29    Australia and Saudi Arabia settle for goalless draw in AFC Asian Qualifiers    Human Rights Watch accuses Israel of mass displacement in Gaza amounting to war crime    Thousands of protesters march in Paris ahead of tense football match between France and Israel    Republicans win 218 US House seats, giving Donald Trump control of government    UN sounds alarm at Israel's 'severe violations' at key buffer zone with Syria    Order vs. Morality: Lessons from New York's 1977 Blackout    Saudi, Indian foreign ministers co-chair Cooperation Committee meeting in New Delhi    South Korean actor Song Jae Lim found dead at 39    Don't sit on the toilet for more than 10 minutes, doctors warn    'Marvels of Saudi Orchestra' to dazzle audience in Tokyo on Nov. 22    Saudi Champion Saeed Al-Mouri scores notable feat in Radical World Championship in Abu Dhabi with support from Bin-Shihon Group    Rita Ora is tearful in tribute to Liam Payne at MTV Awards    France to deploy 4,000 police officers for UEFA Nations League match against Israel    Al Nassr edges past Al Riyadh with Mane's goal to move up to third    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Islamic funds seek socially responsible plan
Published in The Saudi Gazette on 02 - 06 - 2012

The Islamic investment sector can widen its customer base by adopting a socially responsible model, according to industry experts, but distribution channels, a sophisticated investor base and incentive schemes need to be enhanced first.
The links between Islamic finance and socially responsible investments (SRI) are not new, but the former needs a similar transformation which brought SRI into the mainstream.
"The common synergy between the two investor classes should be exploited," said Lynette D'Souza, head of investment strategies group at NCB Capital, at an Islamic conference held in Manama recently. This can lead to greater economies of scale, she added.
Islamic banks are keen to build such scale in order to reverse downward trends in efficiency and profitability, according to an April report by A.T. Kearney.
Islamic finance resembles the screening methodology used by the SRI industry, which has strongholds in North America and Europe.
Assets in Islamic funds, estimated at $58 billion, have marginally changed in the last two years reaching a ceiling of 800 products.
"The industry can break out of these figures by going cross-border," said Sohail Jaffer, deputy chief executive at Dubai-based FWU Global Takaful Solutions. But managers need to get their "international marketing act" together, he said.
Fund houses such as AmInvestment, NCB, and Al Rajhi have sought distribution using UCITS, a passport for investment products, with mixed results. Instead of a regional canvas, they "should focus on two or three markets", Jaffer said. Others have opted for incubation, investing four to five years to build a track record, according to Noripah Kamso, chief executive of Malaysia's CIMB-Principal Islamic Asset Management.
SRI had a similar slowdown a decade ago which ushered in the era of discretionary mandates - currently over 90 percent of SRI assets are managed this way, according to Eurosif. This business model is making inroads in Islamic finance, with some fund managers outsourcing the advisory skill-set.
In March, Saudi-based NCB Capital signed two leading asset managers, TCW and Amundi, to manage seven international equity funds worth a combined $550 million. An established track record was key to the proposition, Fadi El Khoury, head of Middle East distribution at Amundi, told Reuters. The firm manages $1.4 billion in Islamic assets, across 10 mandates and three funds.
Growth in SRI is also linked to institutional backing from pensions and endowments.
"Takaful is one of the most important trends emerging in the Islamic investment industry," Ruggiero Lomonaco, executive director for Middle East and Africa at the Royal Bank of Scotland, told Reuters.
But takaful alone might not be enough.
"You need drivers, a pension culture...to incentivize people to go into the markets," said Ken Owens, partner at PWC Ireland.
Incentives such as pension disclosure regulation, enacted across Europe over the last decade, boosted allocation into SRI. Institutional investors cite such directives as a key reason for investing ethically, according to the Social Investment Forum.


Clic here to read the story from its source.