Private banks missing out on Muslim money

Yuri Bender reports on the paucity of Islamic products available. Index provider Dow Jones is calling on private banks to sign up with its range of 35 Islamic indices, which currently benchmarks $1.5bn of Muslim money. Global director Rushdi Siddiqui estimates the Islamic market, which follows the Koran’s prohibition of interest-bearing investments, is worth at least $100bn, growing around 10 per cent per year. Islam also forbids investment in alcohol, weapons, pork, entertainment and gambling. “There is a mountain of cash sitting in Islamic and Arab banks and no short-term liquid vehicles,” claimed Mr Siddiqui. “There are certainly more depositors than investors among Europe’s Muslims.” Meyer Capital Partners, a US-based manager, is launching an Islamic hedge fund with Dow Jones. Private client products have been launched by HSBC Amana, the Islamic banking unit of HSBC in New York. Mr Siddiqui is particularly concerned about lack of opportunities for Europe’s Muslims. A venture between Deutsche Bank and Saudi Arabia’s National Commercial Bank has launched certificates of deposit, traded in Frankfurt. Mr Siddiqui sees Islamic Exchange Traded Funds, currently on the Dow Jones drawing board, as the next step.