Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Goldman Henry Launches Groundbreaking Fund

Goldman Henry Launches Groundbreaking Fund


New Zealand's first Sharia compliant investment fund is about to be launched.

AmanahNZ Trust and Amanah KiwiSaver Plan are the brainchilds of Brian Henry and Alan Goldman, principals of Goldman Henry Capital Management Ltd.

The venture is tailor-made for the burgeoning Muslim community in New Zealand.

According to latest census figures Islam is one of the fastest growing religions in this country with the number of followers now standing at 46,194 people.

It will also be very attractive to those New Zealanders who wish to invest in a highly ethical trust that operates as an extremely conservative investment vehicle.

In Malaysia, for example, 80% of Sharia-compliant assets are held by non-Muslims because of the security they offer.

AmanahNZ is following a worldwide trend which is seeing global financial hubs like Hong Kong and Britain focusing on serving the Sharia compliant industry.

Lenders that comply with Islam's ban on interest will have more than 70 million customers by 2018, up from 38 million last year, helping to double Islamic banking assets to $US3.4 trillion over the period.

Underpinning this is a global Muslim population growth rate that will be more than twice the pace of non-believers through to 2030.

AmanahNZ will strictly observe Islamic investment principles which include the following:

. Riba - No interest or usury. This is a central tenet of the Islamic finance system which prohibits any unjustifiable increase of capital whether in loans or sales.
. Haraam - No investments in companies involved in business activities prohibited under Islamic law, such as the manufacturing or marketing of alcohol, pork, tobacco, pornography, prostitution, gambling, weapons and many forms of Western entertainment and advertising that are contrary to Muslim values.
. Maisir/Maysir - No speculation or gambling. It is prohibited in Islamic finance to create wealth from chance instead of productive activity. Speculative practises like conventional insurance or gambling on derivatives, forwards, options and futures are not allowed.
. Gharar - No investments which involve excessive uncertainty or risk such as speculative investment, gambling or day trading. Financial products where details of the conditions of sale are unknown or uncertain are generally forbidden.

To ensure it meets these principles all Amanah investments will comply with the requirements of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

It will then be certified by compliance management and Sharia screening company, IdealRatings Inc.

Amanah also has in place an Islamic Advisory Board comprising respected Muslim scholars drawn from local universities and Muslim institutions.

The board, which is headed by Dr Faruk Bali of Massey University, will oversee all aspects of Islamic compliance as well as advising Amanah of issues that may be sensitive to the Muslim community

Any benefits Amanah receives which put it at risk of being non-compliant will be donated to a registered charity, the default being any branch of Red Crescent/Red Cross selected by the directors.

The trust is US dollar denominated and will only invest in stocks of up to 50 corporations which are listed on NYSE, AMEX or main board NASDAQ or cash (US dollars).

No amount of return on the investment is promised but the trust will target 10-14% (USD) average annual growth after fees, expenses and taxation.

Bloomberg View contributor Leonid Bershidsky, for one, is a fan of sukuks - bonds that comply with Sharia law.

"A sukuk is always tied to an underlying asset providing a certain revenue stream, a feature that makes them particularly conducive to financial stability.

"If countries like Greece, Spain and Italy held to Islamic financial principles, they would not have been able to run up enormous unsecured debt burdens," he says.

"They would only have been able to borrow against streams of revenue, such as taxes and customs duties, that they could reasonably expect to collect."

Mr Bershidsky says an Islamic mortgage bond, for example, would consist of Sharia-compliant mortgages, in which the borrower makes a large down payment and pays rent to the lender, who owns the property until the term runs out.
"Subprime mortgage bonds, along with related derivatives that did so much damage during the 2008 financial crisis, would not be possible."

Mr Bershidsky says that in the Islamic world money is not a tradeable commodity, and it has no time value; it is merely a medium of exchange.

As time goes by, all that changes is the level of risk.

"The longer an investor has to wait to be repaid, the greater the chance of an adverse event.

"Goods that do not exist at the time of the sale cannot be sold.

"These principles discourage speculation and the creation of derivatives without a deliverable underlying asset.

"Money is always tied to the real economy and if that relationship was always observed, energy prices, for one, might be much less volatile."

All of which lies at the heart of AmanahNZ's principles.

"The focus for our investments will be on businesses with a low level of debt and organic growth, delivered by producing real and tangible goods and services," says Brian Henry.

"Although our fund ticks all the boxes for Sharia compliance, it also meets the requirements for other religions, including Mormons, Orthodox Jews and Seventh Day Adventists, and could also appeal to someone who doesn't agree with money-lending."

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news