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Derivatives and tax havens.

04/15 &

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02 & 03 - Riba / Increase / Interest / Usury

notes :
1. Opinion expounded are the speaker's opinion
2. I intend to upload this series of lectures until its completion

01/13 What Quran says about: Riba / Increase / Interest / Usury (2007) by Mohammad Shaikh

August 18, 2008 - Mohammad Shaikh chairman-IIPC tv from Pakistan is student of renowned muslim scholar Sheikh Ahmed Deedat (Late)-President of IPCI from South Africa. Mohammad Shaikh is a remarkable muslim scholar with charismatic personality, unique in presenting the relevant Ayats / Signs on a particular topic from Al-Qur'an inorder to clarify the Spirit / Essence in English and Urdu. Jazak Allah. May Allah reward him!

For any Muslim who face a dilemma when dealing with interest from the banking system, and whether it is permissible or not, this lecture finally and very conclusively clarifies the concept of Riba / increase, which has been erroneously promoted and mistranslated / interpreted through time as the interest transaction of the banking system. A lecture that should be watched in conjunction with the sadqa and zakah lecture for a fuller and detailed comprehension of the concept of Riba / increase which Allah has prohibited (made haram)

Islamic sukuk ‘a step-sister of conventional bonds’

DUBAI, April 13 — Reuters

Some US$10-15 billion (RM36-54 billion) of Islamic sukuk have been shelved since the onset of the financial crisis because the specialised debt instruments became a replica of conventional bonds, a banker said today.

New issuance of sukuk, commonly known as Islamic bonds, completely dried up because Islamic banks were structuring them incorrectly from the start, said Sohail Zubairi, chief executive officer of Dubai Islamic Bank DISB.DU unit Dar al-Sharia, which advises on how to structure Islamic products.

“We lost at least US$10-15 billion since the onset of the crisis, I’m talking about 2008 second half,” Zubairi told the Reuters Islamic Banking and Finance Summit in Dubai.

Zubairi said companies looking to issue sukuk had been approaching banks with a proposed sum of money they wanted to raise, say US$1 billion, and soliciting bids — much like they would do if they were seeking to issue conventional bonds.

Instead, authentic sukuk issues should involve the company targeting investors first with a business proposal and inviting them to invest in the company or project. The company would also say how much it expected to generate from the project and the size of a potential return, payable regularly.

“Sukuk collapsed because the starting point was conventional. If the starting point would have been correct, I’m sure we would still have been up and running,” Zubairi said.

“The sukuk that were done, I’m sorry to say, were a step-sister of conventional bonds,” he said. “If sukuk were done in the correct manner I think today people will be running to sukuk.”

Demand for investments and financial services that comply with Islamic law has been growing as Muslims seek what they see as more ethical ways to investment their money. Islam bans receiving interest, as well as investing in companies dealing in alcohol or gambling.

The sukuk market is unlikely to rebound until bonds do as it is so intertwined, Zubairi added.

Obama held hostage by PPPIP

Asian shares retreat, bank plan euphoria fades

TOKYO, March 25 — malaysianinsider — Reuters

Asian shares retreated from two-month highs today as investors paused to assess whether a US plan to deal with banks’ toxic debt would revive the financial system and help pull the economy out of recession.

Japan’s share market shed nearly 1 per cent as bank stocks such as Mitsubishi UFJ Financial Group, the country’s top lender, took a breather, while the yen edged up as the fall in shares tempered appetite for higher-yielding currencies.

The dollar held steady against the euro after a steep rise the previous day on growing expectations of lower euro zone interest rates, and US President Barack Obama said its strength was a sign of confidence in the US economy.

Second thoughts about the US Treasury’s plan to persuade private firms to help rid banks of up to US$1 trillion (RM3.6 trillion) in toxic assets sent Wall Street lower yesterday, reversing some of the hefty gains made on Monday when the plan was released.

Investors remain wary that large advances in stock markets in recent weeks could quickly fizzle out amid a stream of gloomy economic news and weaker corporate earnings as the global recession saps consumer spending and investment.

“The enthusiasm surrounding the US administration’s bank plans has been pared back slightly amidst some doubts about its effectiveness,” Calyon’s global head of FX strategy, Mitul Kotecha, wrote in a client note.

“Nonetheless, the pull back in equity markets was relatively small in comparison to the gains registered over recent weeks and for the most part the reaction to the plans remains positive.”

The MSCI index of Asia-Pacific shares outside Japan fell 0.4 per cent after hitting its highest in more than two months yesterday. It later pared its losses to stand little changed.

The index has gained more than 27 per cent from a five-year low last November.

Yesterday the Dow Jones industrial average ended down 1.49 per cent while the S&P 500 Index shed 2.04 per cent.

S&P futures rose 0.3 per cent in Asian trade today, signalling a slightly positive US start later in the day.

Japan’s benchmark Nikkei fell 0.7 per cent, after jumping 3.3 per cent the previous day to post its highest close since Jan 9. Exporters such as electronics giant Sony Corp tumbled on expectations of weaker earnings.

“The market had entered an extremely overheated zone as of yesterday, coupled with the fact investors lack trading factors now that the US ‘bad bank’ scheme has been unveiled,” said Fumiyuki Nakanishi, manager at SMBC Friend Securities.

Japan reported a record fall in exports in February, with no signs of a demand recovery in its key US and European markets, as well as a sharp decline in imports.

The data pointed to more pain for an economy already mired in its worst recession since the 1974 oil shocks, showing both domestic consumption and overseas demand crumbling under the weight of the global slowdown.

The euro dipped 0.1 per cent against the Japanese currency to 131.69 yen after hitting a five-month high of 134.50 yen in the previous session.

The Australian dollar fell 0.3 per cent to 67.99 yen down from yesterday’s 4½ month high of 69.60 yen, as the pause in stock markets checked appetite for riskier assets.

The euro held steady at US$1.3468 having come down from last week’s 2½ month high of US$1.3739.

US crude futures eased towards US$53 a barrel after an industry group said late yesterday that US crude stocks last week rose much more than analysts had forecast.

US light crude for May delivery fell 72 cents more than 1 per cent to US$53.24, after hitting its highest in nearly three months this week above US$54.00 a barrel.

Indonesia to sell $650m syariah bonds

JAKARTA, March 25 – reported by malaysianinsider– source Reuters

Indonesia’s finance ministry plans to sell its first global syariah-compliant bond issue, or sukuk, before June, backed by 7.5 trillion rupiah ($650 million) worth of assets, a senior official said on Wednesday.

The government of the world’s most populous Muslim nation has already raised more than two-thirds of its gross debt issuance target for 2009, but it wants to tap a wider investor base using a broad array of instruments including syariah-compliant debt.

Rahmat Waluyanto, treasury director general, said the global sukuk would be issued before a Samurai bond issue which is planned for June, and that the size would depend on the underlying assets available.

“We will adjust it based on the underlying asset, and the underlying assets that we have are (worth) around 7.5 trillion rupiah,” he told reporters.

Separately, Dahlan Siamat, an official in charge of Islamic debt at the ministry, said the underlying assets consist of government property in the capital Jakarta which are worth 7.24 trillion rupiah and in Bandung, the capital of West Java province, which are worth 250 billion rupiah.

The sukuk will be issued according to the ijara, or lease-based, principle.

Islamic law bans interest payments so bond holders are instead paid income derived from assets – for example, rent from property, or from commercial transaction such as trade in goods and services.