Monthly Archives: December 2017
- Sovereign Islamic debt issuance by non-Muslim countries is set to hit a 3-year high in 2017
- Islamic finance complies with Sharia, or Islamic law, which prohibits earning interest and bars funding activities involving alcohol, pork, pornography or gambling
- The non-speculative nature of Islamic finance can help to ensure financial stability — a reason why it’s gaining traction globally, experts told CNBC
Buoyed by the perception of more tranquil market conditions and an improving regulatory backdrop, issuance of Islamic debt by non-Muslim countries is set to climb to a three-year high in 2017, according to Dealogic data.
Islamic financial products comply with Sharia, or Islamic law, and are based on the principles of risk and profit-sharing. Sharia prohibits earning interest on loans, and it bars funding activities involving alcohol, pork, pornography or gambling.
The value of sovereign sukuk, or Islamic bonds, issued outside the Middle East and Southeast Asia by non-Muslim countries reached $2.25 billion in the 11 months through November, data by Dealogic showed. That’s higher than 2016’s $2 billion and more than double the $1 billion recorded in 2015.
Islamic finance’s metamorphosis from a niche corner of global banking to a growing source of funding for rest of the world has been aided by a storied list of borrowers who have sold sukuk in recent years.
The government of Singapore was one of the earliest non-Muslim entrants into the space, followed by the United Kingdom, Luxembourg and Hong Kong, which issued their first sukuk in 2014. More recently, African nations such as South Africa, Nigeria and Ivory Coast have made legal and tax changes to, among others, make it easier for borrowers to issue sukuk.
Chinese entities such as Country Garden and Beijing Enterprises Water Group have also issued Islamic bonds through their Malaysian subsidiaries in 2015 and 2017, respectively. The companies used those proceeds to finance projects in the Southeast Asian country.
“The crisis that took place was a result of excessive speculation, which is harmful. Islamic finance has avoided such pitfalls.”
Experts said the global financial crisis spurred governments and companies to diversify their funding options. Islamic finance is seen as a more stable alternative to the conventional banking system and therefore appealed to borrowers still haunted by the gyrations in global bond and equity markets when the U.S. housing bubble burst, they added.
In addition, the asset class has also attracted the attention of investors taking a more ethical approach to managing their money.
“Heightened appeal for sustainable and responsible investing could also be driving the growth for Islamic finance due to the commonalities in values and shared principles,” Ruslena Ramli, head of Islamic finance at Malaysian credit rating agency RAM, told CNBC.
Variety of categories
There are several categories of Islamic financial products, according to the World Bank:
- Mudaraba — a financial expert offers specialist investment advice to a customer and they share any profits at an agreed ratio.
- Musharaka — an investment partnership in which two or more parties, such as the bank and its clients, share profits and losses from a pooled investment at an agreed ratio.
- Murabaha— the financial institution buys the asset, such as a home or a car, and sells it to a client at a profit. Payment could be in a lump sum or in instalments.
- Ijara— the financial institution buys the asset and leases it to a customer for a fixed rental payment. The bank retains the ownership but may transfer that to the client eventually.
- Sukuk — similar to a bond but a sukuk buyer owns part of the underlying asset that is invested for returns.
Sharia principles, which prohibit “speculative-type of businesses,” ensured Islamic finance products were less volatile when global financial markets were rumbled during the debt crisis, said Ahmad Fuzi Abdul Razak, the secretary general of the World Islamic Economic Forum Foundation.
“The crisis that took place was a result of excessive speculation, which is harmful. Islamic finance has avoided such pitfalls,” he told CNBC.
Growing, but still small
Yet, the involvement by those outside the Muslim world is still “sporadic,” experts said. The Middle East and Southeast Asia still account for a large majority of Islamic financial assets. In the sovereign sukuk space, Middle Eastern countries raised $11.85 billion in the 11 months through November, followed by Southeast Asia at $3.96 billion, Dealogic data showed.
Total Islamic financial assets have grown by 10 to 12 percent annually over the past decade to hit $2 trillion. But at less than 1 percent, they remain only a small fraction of global financial assets, according to the International Monetary Fund.
One hurdle standing in the way is the lack of standardization, Fitch Ratings said. Currently, different jurisdictions interpret Sharia differently and there is also variation in how Islamic finance products are structured. Differences in how disputes are resolved and reporting standards are monitored add to the complexity.
“In some cases, there is still little standardization even at a local level, while in others, progress would be needed on a regional, or international, basis,” Fitch said in an October report.
Such divergence in interpretation can deter investors and the progress to resolve that issue will likely be “slow and patchy” given the scale of the challenge, Fitch added.
Experts told CNBC that notwithstanding the challenges, the Islamic finance sector is still poised for growth. The industry’s size is expected to expand further to $3.5 trillion by 2021 as countries and companies look for alternative funding sources, and tap a larger pool of investors.
As an example, Maybank’s head of global banking business, Arshad Ismail, said the sukuk market allows issuers to attract both Muslim and non-Muslim investors and therefore widen their sources of funds.
The financing costs for sukuk are also “generally similar” to conventional bonds as there is more expertise to execute such transactions now, which adds to the product’s appeal, he added.
Yen Nee Lee , CNBC
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By: Aisha Stacey
Islamic etiquette or good manners is a very important subject. It includes, but is certainly not limited to, greeting another Muslim in the proper way or standing up to let an elderly man take your seat in the bus.
All the prophets and righteous people displayed good manners. Their behavior with other people was well mannered and respectful and even more importantly their manner toward God was exemplary.
A Muslim who takes great care with his manners is a person with a strong moral character and an innate understanding of ethics and responsibility.
If Prophet Muhammad was able to see how flippant we are about manners today, it is not too far-fetched to think he would advise us to remember some of the basic teachings of Islam.
In Chapter 33 verse 21 of the Quran, God said that Prophet Muhammad was a good example for Muslims to follow. He did not qualify that statement by saying in this matter, or that matter.
Following the way of Prophet Muhammad in all matters will hold us in good stead in all aspects of our lives; from the very trivial to the very important. Prophet Muhammad was well mannered and respectful in any situation.
In the authentic books of Hadith, Prophet Muhammad is said to have told his companions that God sent him to perfect good manners and to do good deeds. (Al-Bukhari)
Also from among the authentic hadith is a saying attributed to Prophet Muhammad’s beloved wife Aisha in which she describes her husband’s character as the Quran. (Muslim)
These small, seemingly minor, snippets of information combine to give us a great deal of important advice.
Prophet Muhammad’s character was a study in Islamic etiquette. He abided by God’s laws and commands and abstained from God’s prohibitions.
He did so while interacting with the world around him; his responsibility to God was evident in all his interactions.
Prophet Muhammad used Islamic etiquette with his family, his companions and neighbors, the wider Muslim community, and all living things. He was also well mannered when dealing with detractors, unbelievers, and enemies.
Nowadays and across the breadth of Islamic history, there are people who consider themselves to be righteous; they pray, fast and give in charity and yet they have awful manners. They spread gossip and back bite, or they treat their employees with contempt and rudeness.
In many cases they ignore the spiritual and emotional needs of the ones closest to them and fail to understand that the connection between piety and good manners is symbiotic. One cannot exist without the other. To imagine what Prophet Muhammad would say to these people, we only have to read the guidance and advice he gave his companions.
The best among you is the one who is best to his family, and I am the best to my family. (At-Tirmidhi)
The angel Gabriel kept advising me about the rights of neighbors until I thought he would make them entitled to some part of the inheritance. (Al-Bukhari and Muslim)
Nothing is weightier on the scales (on the Day of Judgment) than good behavior. (Abu Dawud and At-Tirmidhi)
By his good character a believer will attain the degree of one who prays during the night and fasts during the day. (Abu Dawud)
The best of you are those who possess the best manners. (Al-Bukhari and Muslim)
It is impossible to practice Islam effectively if we neglect the importance of good manners because Islamic etiquette is something that reinforces our faith. It should be a thread that runs through our day-to-day living complimenting and strengthening our worship.
Islamic good manners consist of spreading peace and mending broken relationships. It involves praying for our brothers and sisters in Islam, advising and calling each other to good and endeavoring to prevent evil or sinful behavior.
Islamic etiquette is also about respect. It directs us to show consideration and care to others; parents, elders, neighbors, members of the community in which we live and those who do not practice our faith.
It is about showing love and compassion to everyone we come in contact with and it includes visiting the sick and staying away from gossip and backbiting.
The scholars of Islam explain that good manners consist of knowing how to treat others. A Muslim must strive to avoid harming, annoying or inconveniencing anyone.
In the Age of Social Media
Prophet Muhammad told his companions that the true Muslim is a person who avoids harming other Muslims with his words or actions. (Al-Bukhari and Muslim)
It might be useful to imagine how Prophet Muhammad would react if he could read the words we use on social media.
With the greatest of ease, Muslims defame and slander each other in public forums. And they do so without the slightest care and with little or no understanding of Islamic etiquette and the sinful nature of such behavior.
Consider another saying from the traditions of Prophet Muhammad:
A man utters a word pleasing to God without considering it of any significance and God raises his status in Paradise; another one speaks a word displeasing to God without considering it of any importance, and for that word he will sink down into Hell. (Al-Bukhari)
Perhaps we should replace the word utters with the word types. While there is undoubtedly great good in the proper use of social media, it can also be a way to accumulate sins.
There are some people who think that the language and tone they use on the Internet is of no significance. But once the words have been typed and sent, they are out there in cyber space and we are not able to retrieve them or control their consequences.
In the privacy of their own homes, people feel free to express themselves in a way that would not be acceptable if they were in public. Prophet Muhammad would, no doubt, remind us to speak a good word or to keep silent. (Al-Bukhari and Muslim)
He would also tell us to be careful of the things we say in case we should inadvertently say something harmful or untrue.
When it becomes a habit to speak badly, two things can happen, often both at the same time. We can forget that Islam has very high standards of behavior and morality, and we can fool ourselves into thinking that our spaces and our words are private.
From behind our screen and from inside our own homes we can berate the world, our communities, our neighbors and even our families.
However, God can see everything we do. Sadly many of us forget this on a daily or even hourly basis. Prayer timing is designed to keep us on track and remind us of this fact. Our private whispers can be overheard by the All Seeing, the All Hearing God.
Remembering this is one of the highest levels of faith. It is something very difficult to achieve without mindfulness in all our actions and interactions.
One way remembering, and examining our behavior at the same time is to ask ourselves if Prophet Muhammad would be proud of our etiquette. Would he think the high level of domestic violence in some communities is acceptable?
Would he think social media was the place to address our grievances with Sheikhs and scholars?
Islamic etiquette should permeate everything we do; it should come as naturally to us as knowing the timing of the prayers, and that Prophet Muhammad is the Messenger of God.
It doesn’t though; sometimes it flies out the window at the slightest opportunity.
The little-known story of how Turkey was one of the only countries to come to the aid of Ireland during the Great Hunger will be the focus of a movie, “Famine.”
Entertainment – as soon as we see this word in the various forms that it consists of today, it gives us a sense of happiness, a sense of belonging.
Entertainment is a form of activity that holds the attention and interest of an audience or gives pleasure and delight. It has captured the hearts of every single human being on the planet. One may ask, how beneficial is it to the human race?
Entertainment comes in many forms. Such as gossip about celebrities, movies, novels, singing, partying, sports, and travel. Just to name a few. Like many other things in life it consists of positive aspects and also has some harm in it. The wise person is the one who navigates through the bad to earn the good whenever and wherever one finds it.
Let’s delve into the Islamic way of entertainment. What! Does that mean entertainment is allowed in Islam? Of course it is! However it consists of stipulations which are to help in the betterment and growth of individuals.
Let’s take a glimpse at how the early Muslims used to entertain themselves, and especially how the prophet Muhammad (Peace be upon him) would find entertainment.
Entertainment in the life of the prophet
It was narrated by ‘Aa’ishah that she took a woman on her wedding night to a man from among the Ansaar, and the Prophet (PBUH) said to her, “O ‘Aa’ishah, was there any entertainment (in the gathering)? For the Ansaar love entertainment.” (Narrated by al-Bukhaari, 4765.)
According to this hadeeth, the prophet not only encouraged but also took part in these happy occasions which involved entertainment. However, these occasions did not involve dancing, music, or mixing freely with the opposite gender. There were some guidelines. For instance the women would beat the Duff and sing, there were no other instruments involved.
How would the Prophet (PBUH) entertain his family?
In this hadith, it implies that having a joyful time with one’s family is very important. As the prophet (PBUH) used to engage in various things that would make his family happy. One should also strive to make his/her family content if it is merely by spending quality time together.
The prophet was a very approachable person. He was also very kind with the people around him and would enjoy social gatherings. Narrated from Jaabir ibn Samurah that the Messenger of Allah (blessings and peace of Allah be upon him) would not get up from the place in which he had prayed Fajr until the sun had risen, and when the sun had risen he would get up.
They used to chat and talk about matters of the Jaahiliyah (pre-Islam era), and they would laugh but he smiled.
Abu Hurayrah said: They said: O Messenger of Allah, you joke with us. He said: “But I never say anything but what is true.” (Saheeh al-Adab al-Mufrad, by Shaykh al-Albaani no. 265. )
In the light of this hadeeth, one can see that the prophet (PBUH) used to joke around with his companions. Just like regular human beings. It is very hard to survive – actually quite impossible to survive without friends and family.
However, we must not forget the rules. Even in social gatherings there are certain rules that one must follow. One example is already given in the hadith and that is that while joking one should not speak falsely about anything. One would assume that it is a simple rule to follow but it actually covers a wide range of topics. For instance gossip. Although it is very entertaining to take part in such activities, one must refrain from such habits as it can become very harmful for the society.
Would the prophet (PBUH) enjoy his time with the youth?
Well the following hadeeth will shed some light upon this topic.
Ibn Maajah (144) narrated from Ya‘la ibn Murrah that they had gone out with the Prophet (PBUH) to a meal to which they had been invited, and there was al-Husayn playing in the street. Prophet Muhammad (blessings and peace of Allah be upon him) came in front of the people and stretched out his hands, and the child started to run here and there. The Prophet (blessings and peace of Allah be upon him) made him laugh until he caught him, then he put one hand under his chin and the other on his head and kissed him.
This hadeeth displays the importance of being warm and loving with the youth. Which has many benefits. One of the benefits is the spread of love and peace in the community.
The Prophet (PBUH) would also enjoy live shows. An example of such shows can be found in the following hadeeth;
Ahmad (24334) narrated that ‘Aa’ishah said: The Messenger of Allah (blessings and peace of Allah be upon him) said on that day – i.e., the day when the Abyssinians played in the mosque: “The Jews should know that there is room for leisure in our religion. I was sent with a tolerant, monotheistic religion.”
Since Islam is a complete and perfect way of life. Henceforth when it comes to everyday life, there are guidelines put down by the Creator for one to follow. By doing this one is not constricting oneself in this vast atmosphere; however he/ she is freeing oneself from the harm that can come out of such kinds of entertainment. As one follows the guided form of entertainment one has fun and along with it gains the pleasure of the Creator, Allah (swt).
Everything that is a part of this world will one day be gone and the real goal of Muslims should be the pleasure of their Lord. As that was also the main goal of our beloved prophet Muhammad (PBUH).
“Say (O Muhammad (blessings and peace of Allah be upon him)): “Verily, my Salat (prayer), my sacrifice, my living, and my dying are for Allah, the Lord of the Worlds” (Al-An ‘aam 6:162).