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December 13, 2008 • 8:30 am 0

Islamic Financing in Latin America: Brazil & Malaysia

Investment opportunities in Islamic markets, basic concepts of Islamic finance and the importance of regulator agencies in developing these markets were among the main topics of the fifth edition of “The Islamic World’s Financial and Capital Markets: Opportunities and Challenges.” Brazil’s Securities and Exchange Commission (CVM) and the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA) sponsored the conference, which took place on December 8th.

Mercado Financeiro Islamico – ABC do Brasil 12.2008

Islamic Finance in Asia: MALAYSA the Islamic Finance Hub

Malaysia Opportunities in Islamic Finance – Bank Negara 12.2008

Islamic Finance Defined and Market Review – HSBC 12.2008

In his opening remarks, CVM Director, Sergio Weguelin, highlighted the importance of establishing a dialogue between market participants with the goal of bringing our two different systems close together. “These are two financial cultures that have much to offer to each other. (Islamic finance) has grown 15% annually, according to IOSCO (International Organization of Securities Commissions,)” he said. Weguelin added that “a larger incorporation by the traditional financial system of concepts that guide Islamic practices, such as the requirement to share risks, would have minimized the abuses that led to the subprime-mortgage crisis.”

BM&FBOVESPA’s International Director, João Lauro Amaral, highlighted the growth potential pf this market in his presentation. “Today the Exchange only has 30 non-resident investment accounts from the Middle East or other Islamic countries, mostly from the United Arab Emirates, which shows the potential we have for developing the growth between our markets,” he said, referring to the participation of Islamic investors in emerging markets such as Brazil.

Banco ABC Brasil S.A.’s International Department Director, Angela Martins, explained principles and characteristics of Islamic finance, such as the concept of Sukuk – “a certificate issued under Islamic law, backed by a contract accepted by Shariah law,” she said. She also explained that money in the Muslim world is not viewed as a commodity, but “as means to add value, without which one would not be able to generate wealth,” she said.

The Vice-President of Global Capital Markets at HSBC in New York, Alexei Remizov, highlighted the importance of the Islamic finance industry in the Persian Gulf countries. Nik Ramlah Mahmood and Kris Azman Abdullah, Directors at Malaysia’s financial regulator agency, discussed Islamic capital markets in Malaysia, and Anthony Saint, with London’s Gatehouse Bank, discussed operations of Islamic banks in the U.K.

Source: Mondovision, 13.12.2008

Filed under: Banking, BM&FBOVESPA, Brazil, Exchanges, Islamic Finance, Library, Malaysia, News, Asia, BM&FBOVESPA, Brasil, Brazil, Bursa, CVM, Exchanges, Financial Crisis, Financial Report, Financial System, Ijara - Leasing, Islamic Capital, Islamic Finance, Islamic Financial Hub, Latin America, Malaysia, Mercado Financeiro Islâmico, Mudharaba - Administration of 3rd Parties resources, Murabaha, sukuk, Takaful - Seguro - Insurance

December 13, 2008 • 3:06 am 0

Asian and Latin American Markets: Where the Economic Upswing Could Start

We have all seen the horrific global turmoil in the last few months. In a Forbes article entitled: “Emerging Markets: What to Buy,” Josephine Jimenez, founder and CIO of Victoria 1522 investments described today’s market conditions as: “The performance of markets around the world this year can be best described as a “sea of red”–with all markets down.” Hearing the percentages that markets and funds have fallen in the last year is extremely frightening – according to the Emerginvest World Stock Markets Page, the UK down 33.27%, Sweden down 39.39%, Germany down 40.51%, China down 60.49%, and Russia down an astonishing 72.46% for the year. Unfortunately, those fear-invoking, year-long statistics seem to dominate any reference to emerging or frontier markets.

However, while the US’s outlook of a prolonged recession looms tall in investor’s minds, what is going unnoticed is that plenty of emerging and frontier markets are posting significant growth figures. Yes, there is still a tremendous amount of volatility in the world, however if you can stomach it, there are hundreds of strong, growth buys to be had.

This past month is a prime example. The US fell nearly 2%, and Europe has been hit hard (Spain -3.29%, Czech Rep. -4.21%, Germany -4.51%, Finland -12.27%, and Norway -16.69%) – all in the last month. However almost no one has been discussing how China soared 16.55% in the last month. Nor are they referencing other good emerging markets: Mexico 6.56%, Brazil 4.42%, Hong Kong 3.58%, and South Africa 3.06%. Even some frontier markets are doing fairly well – Namibia 3.35%, Colombia 2.32%, Cote D’Ivoire 2.12%, and Tanzania 1.27%. Again, these returns are just in the last month.

To further underscore my point, the Forbes article describes a number of tremendous growth areas in Emerging Markets. In response to the question: “In what countries/assets/sectors do you see the most opportunity now?” Justin Leverenz, the VP and Portfolio manager responsible for the Oppenheimer Developing Markets Fund, said: “To be completely honest, this is one of those rare moments where just about all prices are structurally undervalued in emerging markets. However, as in all panics, nervous managers have turned tactical in order to survive.”

Jonathan Bell, co-manager of the Forward Global Emerging Markets Fund of Pictet Asset Management stated in the same article that: “The U.S. economy is likely to go into negative growth next year and consumption will be the biggest drag. I do not want to make predictions for the next few years, but with credit and consumption growth turning negative in 2009, the outlook is not good. According to our estimates, emerging markets could contribute anywhere from 80-100% of global GDP growth next year.”

Source: Seeking Alpha, Jonathan O’Shaughnessy 11.12.2008

Filed under: Asia, Banking, Brazil, China, Colombia, Hong Kong, Korea, Latin America, Malaysia, Mexico, News, Asia, BMV Bolsa Mexicana de Valores, Brasil, Brazil, BVC Bolsa de Valores de Colombia, China 中国, Colombia, Emerging Markets, Emerginvest, Hong Kong, Latin America, Mexico, Namibia, South Africa, Tanzania