Thursday, February 2, 2012

Investing With Allah’s Approval: German Bank Eyes Muslim Customers

From Europe News:

Investing With Allah’s Approval: German Bank Eyes Muslim Customers

Worldcrunch 2 February 2012
By Christian Euler
BERLIN - There are special rules for Muslim investors, who believe certain types of investing are immoral and thus forbidden by the Koran. It is off limits, for example, to invest in companies where interest, derivatives, insurance, alcohol, tobacco, pork, arms, or gambling are involved. The same goes for hedging instruments like gold and silver, or investing in the entertainment industry.
Keen not to alienate any potential clients, Germany's WestLB bank has just launched an investment product that conforms to Sharia law: the Islamic-Strategy Index Certificate (WKN WLZ5SH). The reduced-risk certificate was listed on the Frankfurt and Stuttgart exchanges as of Jan. 20.
The instrument created by Structured Solutions includes stocks quoted on the Dax and Mdax indices exclusively, and is controlled twice yearly. Ideal Ratings, an institute specialized in Islamic investment, checks the financial situations of all potential buyers, whose debts against total assets cannot exceed 30%.
There is a fee of 1.5% per year for structuring the certificate. The starter mix in the Islamic basket includes – in equal numbers -- Adidas, BASF, Bayer, Deutsche Post, E.on, Linde, RWE, SAP, Siemens and ThyssenKrupp stocks. Buyers of the certificate, which has been approved by the Central Committee of Muslims in Germany as being in line with Islamic precepts, automatically become contributors, at least modestly, to social causes. Five percent of dividends go to a charitable cause selected by WestLB. (...)

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