the holy war of islamic finance

Arab investment overseas will rise, say experts

Posted: 15-03-2006 , 11:46 GMT

Arab investment overseas, whether through government-owned portfolios or oil stabilisation finds, will continue to rise through shrewd allocation of funds, according to speakers at the upcoming IPO and Asset Management Middle East conference, organised by MEED, in Dubai on March 27 – 28.

GCC investments abroad have come under the spotlight in the last 12 months, notably with Dubai-based DPI World’s purchase of P&O, the UK port and ferry operator. This follows on from a series of high-profile investments by Dubai government-owned institutions that have grabbed international headlines.

More than $5 billion has already been spent in the last 12 months adding to a strong foreign portfolio that now includes the Tussauds Group, the UK’s Inchcape Shipping Services and a billion-dollar stake in DaimlerChrysler. In late January, Dubai International Capital (DIC), the international investment arm of Dubai Holding, announced plans to set up a $15 billion fund to invest in global blue-chip firms.

Peggy Farley, president and CEO of the US-based Ascent Capital Management, said: “The high-profile investments we have seen are part of an ongoing diversification of the Gulf economies.

“While Dubai’s investments have made headlines, Abu Dhabi and Kuwait have channelled a percentage of their income into the global equity, bond and real estate markets through Abu Dhabi Investment Authority and Kuwait Investment Authority.

“Dubai has leveraged a mass of equity from the proceeds of land sales to feed the booming real estate market, and these judicious investments will continue both at home and abroad.

Alwaleed investirà $2,7 mld in azioni saudite per aiutare borsa

di Dania Saadi

c.2006 Bloomberg News

15 marzo (Bloomberg) -- Il Principe Alwaleed bin Talal, l'ottavo uomo più ricco al mondo, ha detto che investirà 10 miliardi di riyal sauditi ($2,7 miliardi) in azioni saudite, dopo che tre settimane di ribassi hanno polverizzato oltre un terzo della capitalizzazione della borsa nazionale.

Il Principe acquisterà i titoli nelle prossime settimane, ha detto a Bloomberg News la sua portavoce, Heba Fatani, in un'intervista telefonica da Riyadh. "Il Principe è un patriota," ha detto Fatani. Ulteriori dettagli saranno forniti in un successivo comunicato, ha aggiunto.

La borsa saudita ieri è scesa al minimo degli ultimi cinque mesi, dopo aver segnato un record il 25 febbraio, in sintonia con la caduta di quasi tutti gli indici azionari del Medio Oriente, per i timori che le quotazioni siano sopravvalutate rispetto ai risultati societari. Lo scorso anno la corsa al rialzo, sostenuta dai prezzi elevati del petrolio, aveva portato al raddoppio della capitalizzazione delle borse dei paesi arabi, arrivata a $1.300 miliardi.

"Alwaleed probabilmente crede nel valore del mercato ed è disposto a premere il grilletto," ha detto a Bloomberg News Ali Taqi, senior manager della National Bank del Kuwait, che gestisce $4,5 miliardi. L'indice azionario saudita ha guadagnato il 4,7 percento dopo l'annuncio, secondo ABQ Zawya Ltd., servizio che diffonde informazioni finanziarie.

L'indice azionario egiziano CASE 30 ha recuperato il 6,4 percento oggi, il maggior progresso da aprile, dopo che il governo ha dichiarato che intende comprare azioni per sostenere il mercato. La borsa egiziana aveva subito un calo 5,9 percento ieri, la maggiore flessione degli ultimi 12 mesi.

Articolo originale:

Alwaleed to Invest $2.7 Billion in Saudi Stocks

--Con la collaborazione di James Cordahi a Dubai. Editor: Norris.

Story Illustration: per l'andamento dell'indice Tadawul dell'Arabia Saudita, selezionare: {SASE <Index> GP <GO>}.

Versione italiana;

Viviana Vestrucci (39) (02) 8064 4203 o vvestrucci@bloomberg.net

Editor: Alma Davanzo

Per contattare il redattore della notizia originale;

Dania Saadi al Cairo (+20) (2) 461-8509 o dsaadi2@bloomberg.net

Per interpellare l'editor responsabile della notizia originale:

Chris Collins a Londra (44) (20) 7330 7902 o

collinsc@bloomberg.net

Borse arabe crollano, a Dubai peggior calo storico

di Dania Saadi

c.2006 Bloomberg News

14 marzo (Bloomberg) -- Le borse dei paesi arabi hanno subito uno scivolone generalizzato spinte dai timori di un eccesso di rialzo dei titoli rispetto ai risultati registrati, dopo una corsa durata tre anni.

L'indice principale del Dubai ha perso il 12 percento, la peggiore discesa mai subita. Il listino egiziano ha segnato il maggior calo in un anno. I titoli quotati in Arabia Saudita hanno toccato il minimo degli ultimi cinque mesi, arretrando per il terzo giorno.

Le azioni di EFG-Hermes Holding SAE, principale banca d'investimento egiziana, hanno perso un quarto del loro valore. Emaar Properties PJSC, il maggiore operatore immobiliare del Medio Oriente, sono scese al minimo da nove mesi in Dubai.

"La paura si sta diffondendo tra gli investitori, che vendono in preda al panico," ha detto Shahid Hameed, responsabile dell'asset management di Securities & Investment Co a Manama, nel Bahrain. "Molta ricchezza si sta polverizzando da un giorno all'altro."

I mercati del Qatar, Abu Dhabi e Kuwait sono tutti negativi. Gli indici azionari dell'Oman e della Tunisia sono gli unici positivi, ma guadagnano solo lo 0,1 percento o meno.

Le azioni perdono terreno rispetto ai massimi storici che erano stati raggiunti sulla scia di acquisti febbrili incentivati dagli elevati prezzi raggiunti dal greggio, che avevano portato le borse arabe da raddoppiare il valore di capitalizzazione a $1.300 miliardi lo scorso anno.
A deprimere ora le borse dei vari paesi arabi contribuisce il numero record di collocamenti annunciati in quanto gli investitori smobilizzano i pacchetti azionari per fare cassa per sottoscrivere le nuove azioni.

L'indice Dubai Financial Market ha perso il 12 percento a 611,8, secondo i dati apparsi sul sito e lascia sul terreno il 40 percento nel primo trimestre, conquistandosi il primato negativo della maggiore perdita tra 77 indici azionari seguiti da Bloomberg News a livello mondiale.

L'indice della borsa egiziana CASE 30 è sceso del 6 percento a 5922,16 alle 15.47 locali al Cairo, la maggiore variazione tra i mercati rilevati a livello internazionale.

In Arabia Saudita l'indice Tadawul All Share è sceso al minimo da cinque mesi, perdendo il 4,7 percento a 14,900, secondo i dati del sito.

Articolo originale:

Arab Stock Markets Extend Slide: Dubai Index Tumbles Most Ever

--Editor: Campbell.

Story Illustration: per l'andamento dell'indice Tadawul della borsa dell'Arabia Saudita, selezionare: {SASE <Index> GP <GO>}. Per la borsa di Doha: {DSM <Index> GP <GO>}. Per l'indice del Dubai: {DFIML <Index> GP <GO>}. Per l'indice Kuwait Stock Exchange: {KWSEIDX <Index> GP <GO>}.

Per le notizie sulle borse dei paesi arabi: {NI ARABWRAP <GO>}.

Versione italiana:

Viviana Vestrucci (39) (02) o vvestrucci@bloomberg.net

Editor: Alma Davanzo

Per contattare il redattore della notizia originale:

Dania Saadi al Cairo a (+20) (2) 461-8509 o dsaadi2@bloomberg.net

Per interpellare l'editor responsabile della notizia originale:

Chris Collins a Londra (44) (20) 7330 7902 o collinsc@bloomberg.net

Islami Bank given 10 days to explain militants' accounts

The Daily Star - Wed. March 15, 2006

Rejaul Karim Byron

Bangladesh Bank (BB) yesterday served a show-cause notice to the chief executive of Islami Bank Bangladesh Ltd concerning the alleged irregularities in maintaining 'militant-linked' accounts and asked him to reply within 10 days.

The central bank also sent the probe report of the BB inspection teams to the home ministry. The report was prepared after the teams examined a few cases of transactions in the bank suspecting they might have links to the militants.

Following the arrest of militant kingpin Abdur Rahman and seizure of some banking documents from his busted Sylhet hideout, five BB teams probed three branches of Islami Bank, and one each of Rupali and Janata Bank.

The probe teams found some lapses in banking norms and suspicious transactions with the Sylhet, Gazipur and Savar branches of Islami Bank, sources said.

The show-cause notice was served under section 19 of the Anti-Money Laundering Act on the basis of the probe teams' report, a BB source said.

The three branches of Islami Bank violated some of the regulations specified in the Anti-Money Laundering Act, specially the section called 'Know Your Customer (KYC)'.

Despite the fact that there were some "dubious" transactions in its Sylhet branch, the Islami Bank did not report it to the central bank as demanded by law, the sources added.

The BB is waiting for the Islami Bank chief executive's reply before taking action. If the allegation is proved, the bank may be fined Tk 10,000 to 1 lakh and the officials involved may be penalised, even suspended from their job, the source said.

Executive President of the bank Abdur Rakib when contacted by The Daily Star last night said there has been no irregularities in opening the account, but there were something "unusual" in the way the account was operated.

"We have already taken administrative actions against the offending staff," he said.

About not informing the central bank about the suspicious transactions, Rakib said it happened due to the negligence of the branches concerned. "We do mass banking and have got thousands of accounts all over the country. It is not possible to centrally monitor all the irregularities that may have taken place in some branches," he explained.

Besides, the law does not clearly explain which transaction is suspicious and which is not. As a result, the bankers are often in a dilemma regarding which transaction they should report and which they should not, Rakib observed.

Sources said the probe report sent to the home ministry does not have any recommendation -- it only shows the findings. The account holders, account numbers and others who had done transactions with those accounts have been mentioned in the report.

The BB source said the intelligence agencies will now investigate on the basis of the report. The BB has not yet found out any accounts and transactions that match the volume or kind of finance needed for countrywide militant activities.

"Either we have not yet traced the account(s) or the transactions have been done through non-banking channels which are not in our jurisdiction," the source said.

The BB had initiated the probe after police found some banking documents in the JMB chief's Sylhet hideout during his capture early this month. The seized documents are related to Rupali Bank's Pallabi Branch in Dhaka, Janata Bank's Brahmanbaria Branch and Islami Bank's Lal Dighirparh Branch in Sylhet.

One Sabbir Ahmed opened the account with the Lal Dighirparh Branch, but it was operated by Saidur Rahman, former Habiganj district ameer of Jamaat-e-Islami. The account with Rupali Bank's Pallabi Branch is in the name of Saidur.

Ubs punta su islam e Medio Oriente, integra società Noriba

GIGANTE ELVETICO VUOLE RAFFORZARE PRESENZA NELLA FINANZA ISLAMICA

UBS: PUNTA SU ISLAM E MEDIO ORIENTE, INTEGRA SOCIETA' NORIBA

GIGANTE ELVETICO VUOLE RAFFORZARE PRESENZA NELLA FINANZA ISLAMICA

Zurigo, 14 marzo 2006 - (Adnkronos/ats) - Ubs vuole rafforzare la sua presenza nel settore in piena crescita della finanza islamica: il numero uno bancario elvetico ha deciso di integrare interamente nel gruppo la società Noriba, impresa fondata nel 2002 dalla stessa Ubs, con sede nel Bahrain, che è specializzata negli investimenti conformi alla sharia (la legge islamica) da parte di facoltosi clienti privati o istituzionali. La banca sta anche cercando attivamente opportunità di acquisizioni nel Medio Oriente. Noriba appartiene già al 100% all'Ubs, ricorda l'istituto in un comunicato odierno. Finora però diversi clienti islamici, alla ricerca di possibilità di investimento conformi alle loro credenze religiose, si sono rivolti direttamente a UBS e non alla sua unità specializzata. Per far fronte a questa situazione Ubs ha deciso di inglobare interamente Noriba entro la fine del 2006. «L'intera gamma di servizi del modello operativo integrato di Ubs raggiungerà così più agevolmente la clientela in cerca di opportunità d'investimento conformi alla sharia», indica la banca.

Per Ubs si tratta inoltre di «evidenziare ancor più chiaramente l'impegno di lunga data» verso il Medio Oriente, considerato «un mercato importante». Sono 200 i collaboratori nelle unità della regione, di cui 65 impiegati locali. «Ubs vanta oltre 40 anni di esperienza in Medio Oriente e persegue un obiettivo strategico teso ad espandere la propria attività nella regione: a tal fine, la banca sta vagliando attivamente diverse opportunità», precisa il gigante bancario elvetico. Nel settembre 2005 Ubs ha cofondato il Dubai International Financial Exchange; figura inoltre tra i principali istituti nel settore delle fusioni e acquisizioni in Medio Oriente.

The Crime of Being a Muslim Charity

The Treasury Department is playing target practice with American Muslim charities. On Feb. 19 Treasury seized the assets and froze the operations of KindHearts, a Toledo-based humanitarian organization, acting on the dubious allegation that it is financing terrorism.

The Crime of Being a Muslim Charity

By Laila al-Marayati and Basil Abdelkarim
Sunday, March 12, 2006; Page B07
The Treasury Department is playing target practice with American Muslim charities. On Feb. 19 Treasury seized the assets and froze the operations of KindHearts, a Toledo-based humanitarian organization, acting on the dubious allegation that it is financing terrorism. Someone from Treasury once told us, "There are folks here who look at you guys like notches on their belts . . . just waiting to take the next one out."
Unfortunately, those of us in the American Muslim community who want to give to legitimate causes in a lawful manner are getting mixed messages from the U.S. government. We are told that if we conduct due diligence and function transparently, we should be able to give to charities of our choice. Then the government closes most of these charities, using the weakest of evidence to support its actions and leading many American Muslims to believe that our government opposes efforts to help needy Muslims around the world. Moreover, the arbitrary freezing of assets ensures that the money will never reach the destination intended by the donors -- the truly indigent. The government has consistently denied requests to have the frozen funds released to reputable organizations (that are not on any lists) doing similar work so that the donors' intentions are honored.
Under the USA Patriot Act, the U.S. government is authorized to close down a charity while an investigation is going on. The government is under no obligation to reveal the evidence used to justify the seizure of assets and the designation of the charity as a "specially designated national," i.e. a bad guy on the list of suspected terrorists issued by the Treasury Department.
The organization can file an appeal, but as was noted in a recent paper titled "Muslim Charities and the War on Terror" by the organization OMBWatch, "appealing Treasury actions to the federal courts is relatively useless, as the court's scope of review is very limited."
Since Sept. 11, 2001, six American Muslim charities have been shuttered in this fashion. The government still doesn't have a single terrorism conviction against any of the employees or board members of any of those charities. Similarly, the government has never been able to document a bona fide trail showing how money from the charity got into the hands of actual terrorists. Never.
We believe it is possible to provide sustenance to people in need without supporting terrorism. But the message we are hearing is this: "All Muslims are suspected of supporting terrorism. Your charities are guilty of this crime until proven innocent. But don't bother trying to prove your innocence because you won't have the chance." The government has not taken action against a single non-Muslim charity that works in the same region helping to feed, educate and sustain people who had also received assistance from the Muslim charities accused of financing terrorism.
We are among those American Muslims who decided that because it is our right as Americans to fulfill our religious obligation to help the needy both here and abroad, we would start a new charity. We did so in 2002 and have experienced our fair share of government harassment as a result.
None of us is interested in engaging in illegal activity; it is immoral, unethical and un-Islamic, and it serves no useful purpose whatever. Our crime is that we care about what happens to the children of Palestine. Who knows what price we will have to pay for our hot-breakfast program for hungry kids in Gaza, for our playground project in the West Bank, for our psychosocial trauma center in Hebron.
Under former attorney general John Ashcroft, American Muslim charities were closed as part of the charade to make the American people believe the government was disrupting terrorist financing. Today, under Alberto Gonzales, the message is that Muslim Americans will be punished if they want to help Palestinians. Either way the assault on our charities is not about the safety and security of the American people but about politics.
The writers, both physicians, are board members of KinderUSA, a Muslim American nonprofit humanitarian organization.

Faith-based funds a growing subset of socially responsible investing

In the small but growing world of religious mutual funds, few managers face more restrictions than Nick Kaiser, yet none has done better the past few years.

Kaiser manages the Amana Trust Growth fund, which invests according to Islamic law.

Faith-based funds a growing subset of socially responsible investing
- Kathleen Pender
Sunday, March 12, 2006

San Francisco Chronicle

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/12/BUGFEHM4O21.DTL

In the small but growing world of religious mutual funds, few managers face more restrictions than Nick Kaiser, yet none has done better the past few years.

Kaiser manages the Amana Trust Growth fund, which invests according to Islamic law.

Like most religious funds, it excludes companies involved in tobacco, alcohol, gambling or pornography. The Amana fund also eschews pork, but unlike funds designed for Catholics, it has no beef with contraceptives.

Islamic law forbids the payment or collection of interest, which keeps the entire financial services industry out of the fund. It should exclude any company that has debt, but that would eliminate all but 35 of the companies in the Standard & Poor's 500 index.

"One of the Islamic scholars (who advise the fund on religious issues) said, 'We're also concerned about companies with too much cash. They are earning interest on that cash.' But excluding them would bring the portfolio down to zero," says Kaiser.

As a compromise, the fund generally will invest in a company if its debt is not more than one-third of market value.

The fund itself is not supposed to earn interest, so Kaiser keeps the cash he needs to meet withdrawals in a non-interest-bearing account. If the fund did earn interest, it could "purify" it by giving it to an Islamic charity. But that would create regulatory problems, so Kaiser forgoes interest.

Kaiser figures that only 45 percent of the 5,000 stocks he follows are halal, or permissible under Islamic law.

Despite its narrowed universe, the fund over the past three years has returned 28.4 percent a year on average, beating the S&P 500 by 10.9 percentage points per year.

Morningstar ranks it in the top 2 percent of all large-cap growth funds over the last 1, 3, 5 and 10 years.

Kaiser says the strict Islamic restrictions sometimes help and sometimes hurt performance.

"Lately, technology and resources, which we can have, have done well," he says. Debt-free Apple Computer has been a big winner. He also has a large stake in Genentech.

"During the last 25 years, financial services have grown to be 40 percent of the economy. That we haven't been able to take advantage of. Last year, the banking sector didn't do very well. Fine, we weren't in that sector. But there may be times in the future" when the banking ban will hurt, he says.

Morningstar analyst David Kathman says, "a lot of the factors that result from Islamic law are actually good long-term investment strategies anyway."

For example, the fund's turnover is extremely low -- less than 10 percent a year compared with 100 percent or more for a typical stock fund. That's partly because excessive trading is considered speculation, which is haram, or forbidden.

Other funds that follow Islamic law have not done nearly as well as Amana. Over the past three years, the Dow Jones Islamic fund, which is partially tied to the Dow Jones Islamic index, is up 14.6 percent a year on average, and the tiny Azzad Ethical Mid Cap fund is up 16.4 percent a year. Both are trailing the S&P 500.

Kaiser said that over the long term, because of the fund's limitations it will be hard for him to continue beating the market.

That's not a problem for some Muslims, he says. In the Islamic community there's a term, "COBM," or the cost of being Muslim.

Kaiser also manages the Amana Trust Income fund, which follows the same Islamic guidelines. The fund's income comes from stock dividends, not bond interest.

Kaiser, who has degrees from Yale and the University of Chicago, is not Muslim, nor is he particularly religious. "I stumble into the Episcopal church once in a while," he says.

His company, Saturna Capital of Bellingham, Wash., manages money for many clients, including the nonreligious Sextant family of no-load funds.

He says managing Muslim money is an intriguing challenge. "Many money managers have clients with special needs. It is extra work, but it's interesting."

For religious guidance, he relies on Muslim scholars and on Monem Salam, Saturna's director of Islamic investing.

I asked Salam, who was born in Pakistan and raised in Texas, to explain the restriction on interest.

"The Quran says that riba (or interest) is an oppression. That's why it is forbidden. It is unjust as well," he says.

A number of Islamic banks sidestep the ban by taking in money and deploying it in ways deemed halal. There is no fixed interest rate. The return to depositors depends on how much profit their capital generates.

(Several Islamic countries have sold sovereign bonds, called sukuks, that are structured along the same lines. Dow Jones is introducing a sukuk index.)

Salam also explained the concept of zakat, which is like a tithe. Muslims, he says, are expected to donate 2.5 percent of any wealth they have held for more than a year to Islamic charities. For shareholders who want it, the Amana funds will calculate the zakat due on their fund profits.

The two Amana funds, available only to U.S. investors, have about $250 million in total assets.

They are dwarfed by the largest religious fund group, GuideStone, with $8.9 billion in assets. The biggest single religious fund is Guide Stone Growth Equity, with $1.5 billion.

GuideStone funds are affiliated with the Southern Baptist Convention. They had been called AB funds, but the group recently changed its name and is reaching out to other evangelical Christian churches.

Religious funds generally target a particular denomination -- often through churches or church publications -- but are open to anyone and must follow the same regulations that apply to all funds.

They are a smaller, newer addition to a category known as socially responsible funds.

Most social funds have a liberal bent and screen out companies involved in tobacco, weapons, gambling or animal testing or that have questionable records on the environment, labor relations or human rights. Religious funds usually add faith-based criteria, such as shunning companies involved in abortion or that provide domestic-partner benefits.

Some social funds, including some religious ones, take a different tack at times. Instead of excluding a company, they buy its shares and try to change its behavior by talking with management or supporting shareholder resolutions.

Some funds go a step further and invest a small portion of assets in community development, such as making loans to small businesses or for low-income housing.

"A number of the (religious) funds take part in social resolutions, in ongoing dialogues on things like worker rights or the environment," says Todd Larsen, a spokesman for the Social Investment Forum.

"The most active is MMA Praxis," a Mennonite fund. "They're working on things like fair trade, HIV AIDS and human rights. They also do community investing," Larsen says.

Some religious funds, such as Amana, are no-load and sold without a commission. Many are load funds sold through brokers.

Some of the religious funds, such as LKCM Aquinas, are parts of larger, nonreligious fund groups. Many, including Amana and GuideStone, hire outside, nonreligious firms to manage the investment side of the business.

At the end of 2004, the socially responsible universe included 201 funds with $179 billion in assets, according to Larsen. That included 55 faith-based funds with $12.4 billion in assets.

Both are slivers of the total U.S. mutual fund industry, which has more than $9.2 trillion in assets.

Not all funds offered by religious affinity groups engage in religious screening. One example is the Thrivent family of funds, which are offered by a Lutheran fraternal benefit organization.

"What's socially responsible for one is not for another," says Paul Kelash, a spokesman for Thrivent Financial for Lutherans. "Defining attributes that make something socially responsible has never been clear, so we avoid doing it."

Some critics say socially responsible funds sacrifice performance because of their limitations.

But in 2002, a trio of researchers from Maastricht University in the Netherlands found that from January 1990 to March 2001, there was no statistically significant difference between the risk-adjusted returns of socially responsible or ethical funds in the United States, Germany and the United Kingdom and those of conventional funds."

That might be true, but any social or religious fund could be a winner or loser. The result -- as the Amana fund shows -- depends on the skill, luck and good timing of the manager more than it does on the ethics involved.

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.

Faith-based investing

A look at some mutual fund groups that invest in part according to religious
beliefs

Fund group Religious affiliation Number of funds Religious/ethical
criteria

Fund group - Amana
Religious affiliation - Muslim
Number of
funds - 2
Religious/ethical criteria - Avoids interest and investments in businesses
such as liquor, pornography, gambling, pork products and banks. Avoids bonds.
.
Fund group - Ave Maria
Catholic
Number of funds - 3
Religious/ethical criteria - "Pro-life and pro-family beliefs." Excludes
companies connected with abortion, pornography or that offer employees
nonmarital partner benefits.
.
Fund group - Azzad
Religious affiliation - Muslim
Number of funds - 2
Religious/ethical criteria - Bans companies involved in alcohol, meat
products, tobacco, gambling, pornography, financial services, unethical forms
of entertainment, weapons of mass destruction. Will not earn interest or invest
in companies that do.
.
Fund group - Catholic Equity
Religious affiliation - Catholic
Number of funds - 1
Religious/ethical criteria - Screens out companies that provide
abortifaciants. Advocates for social values.
.
Fund group - Dow Jones Islamic
Religious affiliation - Muslim
Number of funds - 1
Religious/ethical criteria - Generally excludes alcohol, tobacco, pork,
conventional financial services, weapons, entertainment. Does not invest in
interest-paying instruments.
.
Fund group - LKCM Aquinas
Religious affiliation - Catholic
Number of funds - 4
Religious/ethical criteria - Screens out companies involved in abortion,
contraceptives, weapons, gender and race discrimination. Also considers human
rights, economic priorities, environmental responsibility, fair employment
practices.
.
Religious/ethical criteria - Fund group - GuideStone
Southern Baptist
Number of funds - 17*
Religious/ethical criteria - Excludes companies with known ties to alcohol,
tobacco, gambling, pornography or abortion.
.
Fund group - MMA Praxis
Religious affiliation - Mennonite
Number of funds - 5
Excludes alcohol, gambling, tobacco, abortion-specific products, military
contracting. Invests in companies with good records in community investment,
employment equity, environment, human rights, labor relations.
.
Fund group - New Covenant
Religious affiliation - Presbyterian
Number of funds - 4
Religious/ethical criteria - Screens out gambling, alcohol and firearm
related issues. Actively promotes socially responsible practices involving the
environment, social and racial equality, shareholder action and community
support by voting shares in portfolio.
.
Fund group - Timothy Plan
Religious affiliation - Conservative Christian
Number of funds - 10*
Religious/ethical criteria - Boasts of "zero tolerance stand in moral
screening." Excludes abortion, pornography, anti-family entertainment,
nonmarried lifestyles, alcohol, tobacco and gambling. Patriot fund invests in
companies with government contracts.

Source: Chronicle research, Social Investment Forum

Brown to boost Islamic banking

The sharia finance industry is one of the fastest-growing markets in the world, and is estimated to be worth between £200 billion and £300 billion globally.

Brown to boost Islamic banking

Abul Taher and David Smith

The Sunday Times (London)

March 12, 2006
http://www.timesonline.co.uk/article/0,,2087-2081527,00.html

GORDON BROWN is drawing up plans to turn Britain into the most Islam-friendly economy in the western world.

The chancellor has given Muslim leaders private assurances that he wants to create a “level playing field

Pakistan Power Utility Launches PKR8 Billion Islamic Bond

KARACHI -(Dow Jones)- Pakistan's state-run power utility, - Water and Power Development Authority, or WAPDA, - has launched a PKR8 billion ($133.6 million) Islamic bond, the country's first such issue in the domestic market.

Pakistan Power Utility Launches PKR8 Billion Islamic Bond

According to a statement issued Saturday by Jahangir Siddiqui & Co., one of the lead managers of the Islamic or Sukuk bond, the issue included a green-shoe option of PKR3 billion.

"Given the strong market response, WAPDA has decided to exercise the green- shoe option and issue Sukuk certificates of PKR8 billion," the statement said.

The seven-year Sukuk bond will mature Oct. 22, 2012, it added. The price guidance on the deal is 35 basis points over the six-month Karachi Interbank Offered Rate.

The offering is based on the Sharia principal of Ijarah - or leasing - and the revenue streams backing the offering are electricity payments from customers which will be directed to a special purpose vehicle called WAPDA First Sukuk Co. and then passed on as coupon payments.

Under Sharia law, Islamic bonds can't pay interest or have links to banned activities such as gambling. Islamic bonds typically get approval from a Sharia board to make sure that they comply with Sharia law. Most banks involved in Islamic banking have Sharia boards.

The proceeds from the issue would be used to upgrade the Mangla dam, located in central Punjab province, the statement said.

The issue is the first Islamic bond issuance in the domestic market.

KINDKINDHEARTS FALLOUT

Muslims find giving to charity now harder

Abdul Hammuda nods to his customers - a steady stream there for takeout and the mix of Libyan, Moroccan, and Lebanese cultures.

KINDKINDHEARTS FALLOUT
Muslims find giving to charity now harder

KindHearts' Jihad Smaili says his charity's future is in doubt.

Zoom | Photo Reprints

By CHRISTOPHER D. KIRKPATRICK
and DAVID YONKE
BLADE STAFF WRITERS
Abdul Hammuda nods to his customers - a steady stream there for takeout and the mix of Libyan, Moroccan, and Lebanese cultures.

He's a success story, an engineer who started several bakeries in the Arab-rich Toledo and Detroit metropolitan areas and chased down the American Dream. But there's a darker side to being Muslim in America these days: He asks a reporter not to name his business - bowing to the inevitable brick that would come crashing through his window, he says off to the side.

The Libyan, who has lived in the United States for decades, said it's increasingly difficult for Middle Easterners here to celebrate their culture and religion without being scrutinized as supporting terrorists.

Islam, like other religions, requires giving to the poor. For Christians, it's called tithing. For Muslims, the practice is zakat, and there are rules for how the money is distributed.

But the Muslim community is finding it difficult to run charities without suspicion of funding terrorist organizations, they say. Toledo-based KindHearts

- started after several major Arab charities were closed in 2002 - was shuttered by the Treasury Department last month for suspected ties to Hamas, considered a Palestinian terrorist group.

Mr. Hammuda, who knows one of the indicted men, Marwan Othman El-Hindi, 42, planned to start a local charity with him. But the plans have fizzled since the arrest, he said.

"I knew him; we were not friends. ... He portrayed himself as someone who had experience with grants. I put him on the board," he said of Mr. El-Hindi. "I was just as shocked as everyone else [by the arrest]."

Along with Mr. El-Hindi, Mohammad Zaki Amawi, 26, and Wassim I. Mazloum, 24, were charged with conspiring to kill or injure people in the Middle East and with providing the "support and resources."

A fourth man was identified in a federal indictment only as "The Trainer." But local Muslims have identified him to The Blade as 39-year-old Darren L. Griffin of Toledo, known by his Muslim name as Balil. He has not been arrested, according to law enforcement. Mr. Griffin worked part time at KindHearts for more than three years.

Mr. El-Hindi also once managed a Chicago travel agency owned by a New York doctor who violated U.S. sanctions against a Saddam Hussein-led Iraq. Rafil Dhafir, who hired Mr. El-Hindi in 1997 and ran a charity called "Help the Needy," was convicted for illegally sending funds to Iraq and for Medicare fraud. He was sentenced to 22 years in prison.

Mr. Hammuda's charity would have helped local needy of all backgrounds with tax preparation, the English language, and other practical needs, he said. Helping those near is important in Islam, he and others have said.

"My personal belief is that we owe to the place where we live," he said.

But for those who want to give to Palestinian charities, for example, or to international Muslim charities, in general, it has become problematic.

Last week, the American Muslim Task Force on Civil Rights and Elections, a Washington-based coalition of U.S. Muslim groups, requested a meeting with Treasury Secretary John Snow to discuss KindHearts and "the continued targeting of Muslim charities without due process of law."

Dr. Hatem Elhady, president of KindHearts' board of directors, said it is still waiting. Treasury spokesman Molly Millerwise said she cannot comment on the secretary's schedule.

Running a Muslim charity in America has become a "very risky business," Dr. Elhady said. He has gotten calls from other U.S. Muslim charities worried the government will shut them down, even if they've done nothing wrong.

"They said that if this happens to KindHearts, and we were so strict about our money distribution, than everybody is targeted," he said. "No Muslim can do charity work in America anymore, because it's become a very risky business."

The Treasury Department used an executive order to padlock KindHearts' West Toledo offices and freeze $1 million while it investigates alleged ties to Hamas.

Jihad Smaili, a Cleveland lawyer and member of KindHearts' board, said even if cleared, the charity is on its deathbed.

"Every minute that passes, KindHearts further loses its breath," he said. "In fact, it's already dead."

Terrorism expert Mathieu Deflem, a University of South Carolina sociology professor, said well-meaning charities can fall victim to money launderers. Other groups have been clear fronts for terrorism, he said.

"There's a legitimate concern, definitely, that is quite beyond dispute," he said.

"But there is a gray zone. There are three areas: Terrorism money that clearly goes to suicide bombers, money that is clearly used for humanitarian causes, and then you have that gray zone in between."

Recent political events, particularly the election of Hamas as the ruling party of the Palestinian Authority, contribute to the gray zone, Mr. Deflem said.

As well, a shotgun approach to law enforcement also is contributing to the problem: "It's easier to shut down a charity than find the terrorists who are receiving the money," he said.

"There are still legitimate crusades for Arab and Muslim groups in this country, and it is going to be, indeed, increasingly difficult to separate themselves from terrorist organizations or individuals," he said.

"In that sense, of course, there is a fear and a danger of anything that is Arab and Muslim-related."

For its part, KindHearts says it tracked donations and is innocent. The group was founded in 2002 after the government shut down the three largest U.S. Muslim charities. It raised $2.9 million the first year, $3.9 million in 2003, and $5.1 million in 2004.

The charity underwent a two-year investigation by the Senate Finance Committee, along with two dozen other U.S. Muslim charities, without charges. KindHearts officials said they knew the political climate after 9/11 and painstakingly followed federal laws and guidelines.

The charity set up offices in Lebanon, Pakistan, and the Palestinian territories. By sending funds to its own offices, rather than to foreign nonprofit organizations, KindHearts had near-total control, Mr. Smaili said.

Giving to the poor is one of the five "pillars" of Islam, and there are eight rules in the Qur'an for how the money can be used.

Among the acceptable causes are orphans, the poor, travelers in need, someone with a sudden financial emergency, public projects such as roads, and salaries for charity workers.

Zakat is either 2.5 percent of salary or accumulated wealth, depending on a person's interpretation of the holy text. It's considered the minimum amount a Muslim should give.

"It's like Christians' tithes, which is 10 percent," said Imam Ibrahim S. Abdul-Rahim, spiritual leader of the Toledo Masjid of Al-Islam on Ewing Street. "Islam has something similar."

Imam Ibrahim said there are no rules against giving money beyond the 2.5 percent, called sadaqah, to mainstream American charities such as the United Way and American Red Cross.

"I give to United Way myself. I was born and raised in America and some of the things we see in the African-American community are that most of our interests and concerns are domestic, right here in this country. I'd rather see Islamic-based organizations do things that are needed here in American first, although there's nothing wrong with supporting international causes."

KindHearts gave to the YMCA, which is a Christian organization, Dr. Elhady said, and the Islamic Center of Greater Toledo has donated money to Christian-run soup kitchens, according to Dr. S. Zaheer Hasan, a spokesman for the mosque in the Perrysburg Township.

"Giving to the poor is mandatory and it teaches us to not become too attached to the wealth of the world," Dr. Hasan said. "When it is given, it purifies your wealth, and whatever is left you can enjoy with great thanks go [to] God."

He said the KindHearts issue has caused some local Muslims to fear giving to Muslim charities that help internationally.

"I think there are some courageous people who would still take that risk, but there are those that are very careful," Dr. Hasan said.

"They may not end up sending any money to a charity that works overseas."

Blade staff writer Joshua Boak contributed to this report.

Contact Christopher D. Kirkpatrick
at: ckirkpatrick@theblade.com
or 419-724-6077.