WORKING HOURS

9:00am to 06:30pm

CALL US

+91 11 29945946

MAIL US

info@icif.in

Bloomberg : Brazil Targeting Mideast Riches With First Islamic Fund

 

Brazil Targeting Mideast Riches With First Islamic Fund

 

Banco do Brasil SALatin America’s biggest bank by assets, is courting investors in the Middle East and Asia as it prepares to startBrazil’s first Shariah-compliant equity fund this month.

The fund will focus on shares of companies in industries including commodities, energy, mining and retail, according to Carlos Takahashi, chief executive officer of BB DTVM, the asset management division of the lender. Representatives of the bank last month met investors in the United Arab EmiratesSingaporeand Hong Kong, he said, declining to comment on the size of the fund or expected returns.

“We’ve been studying and considering this fund for the past three years, and we recognize we are ready to launch it,” Takahashi said in a phone interview from Sao Paulo May 23. “It took us a while to understand all of the particularities of Islamic finances, and it’s important for us to reach for those investors and get closer to them.”

BB DTVM, Brazil’s biggest fund manager, is the latest in a string of money managers trying to secure a slice of the fast-growing Shariah-compliant industry. Lenders that adhere to the religion’s ban on interest will have 70 million customers by 2018, up from 38 million last year, helping to double Islamic banking assets to $3.4 trillion over the period, according to Ernst & Young LLP.

Best Performing

The world’s best-performing Shariah-compliant equity-focused fund in the past 12 months is National Bank of Abu Dhabi PJSC’s MENA Growth Fund, which has returned 69 percent, according to data compiled by Bloomberg. The Ibovespa (IBOV) index, Brazil’s Sao Paulo-based benchmark gauge of stocks, lost 5 percent in the period, the data show.

“In terms of risk profile, these asset classes are new to the industry and so from a diversification standpoint there should be interest,” Abdul Kadir Hussain, who oversees about $700 million as CEO at Mashreq Capital DIFC Ltd., said by phone from Dubai yesterday.

Other funds are springing up to tap the Shariah-compliant industry’s growth. Asset manager Threadneedle Investments got a license to offer Islamic products to institutional investors in Malaysia in January. The Asian country’s RHB Asset Management began a new equity and fixed income fund targeting the Asia Pacific region, its 10th Shariah-compliant offering.

In London and Dubai, RiverCrossing Capital Partners, an Islamic alternative investment company, set up in April with a $125 million fund investing in U.S. real estate.

“The jury is still out on how big the market for these will be outside the Islamic banks,” Hussain said. “Depositors are going to have to take cash out and put it in these other assets. One would think that will happen, but it’s early days.”

Fat Cattle

Brazil had a Muslim population of about 35,000 people at the end of 2010, according to the most recent data compiled by the national statistics agency, known as IBGE. Most Muslims living in Latin America’s biggest economy are located in the Southeast and Southern parts of the country, according to IBGE.

Banco do Brasil’s new fund will be managed in Brazil and marketed by partner brokerage houses in the Middle East and Asia, Takahashi said. BB DTVM had 512 billion reais ($228 billion) of assets under management, including bonds and equities as of the end of April, according to data provided by local capital markets association known as Anbima.

If the fund is successful it won’t be the first time Middle East Islamic cash has found its way to Brazil. Abu Dhabi Equity Partners, a boutique investment bank based in the Cayman Islands, started a $25 million financing program to fatten cattle held by ranchers in Goias and Sao Paulo states, it said in January.

www.bloomberg.com/news/2014-06-02/brazil-targeting-mideast-riches-with-first-islamic-fund.html

Posted Date : 04 June 2014

News Updates

  • ISLAMIC FINANCE FOR FINANCIAL INCLUSION AND INFRASTRUCTURE DEVELOPMENT IN INDIA

    India is on track to overtake the UK to become the world’s fifth-largest economy in 2018, according to data and forecasts from the IMF. Soon it will trail only Germany and the ‘big three’ – the US, China and Japan. However, the Indian banking system is gasping for breath with...

    Read More
  • Islamic Development Bank seeks tie-ups for infrastructure investments

    Islamic Development Bank exploring joint opportunities with other multilateral development banks to invest in India’s infrastructure sector Tue, Jun 26 2018 Utpal Bhaskar Mumbai: Islamic Development Bank Group, one of the largest lenders to Muslim countries, is interested in exploring joint...

    Read More
  • BRINGING ISLAMIC BANKING TO INDIA

          Trying to bring Islamic banking to India   Though Muslims are a minority in India and are generally less affluent than Hindus, in sheer numbers they make India the second largest Muslim nation in the world. Cumulatively, their investment power is tremendous and rep...

    Read More
  • IMF ACCEPTS FINANCIAL ISLAM

      Criminal for our education sector to ignore it any longer Dr Mehboob Makhdoomi Srinagar | Posted : Jun 3 2018 The International Monetary Fund (IMF) has finally incorporated Islamic Finance into its financial sector assessments beginning January 1, 2019, calling Islamic Finance ...

    Read More
  • Islamic Finance Muslims in India develop mutual health insurance scheme as alternative to takaful

    Islamic finance pioneers and like-minded community leaders in India have come together to introduce an alternative product to formal takaful, which doesn’t exist in the country. A not-for-profit health assurance scheme, called Uplift Mutuals Biradaree, started in April this year at two of M...

    Read More
  • INT’L ZAKAT CONFERENCE KERALA CATERS HOPE FOR CREATIVE ZAKAT SYSTEM IN INDIA

    By HABEEB RAHMAN CP The International Zakat Conference, organised by Baithuzzakath Kerala, concludes in Cochin with the new hope for the effective zakat management in the country. More than 250 high-profile delegates from various parts of the country and other nations participated in the conference...

    Read More
  • ZAKAT THE SOURCE OF SOCIAL UPLIFTMENT AND ECONOMIC EMPOWERMENT

    Dr. Rahmatullah Abdul Ahad dwells upon how Zakat can be a source of social upliftment and economic empowerment. Poverty, which indicates the absence of material means, is rampant in all the states of India irrespective of caste and clan wise composition of the society. The consequence is sufferings...

    Read More