This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Dec 21 - 27, 2015.
Baiza Bain has 16 years of experience in various sectors of the Islamic finance industry, particularly in research and development. He is currently with Maybank Asset Management Group. The views expressed here are his own.
WHEN I began writing this column in January, the year end seemed so far way. Yet, here we are, counting the last days of December in anticipation of the New Year. I would like to do a short recap of the issues and products that were discussed in this column during the year. It is always good to take a look back before moving forward.
January — We started 2015 by looking at the sukuk market and how it was going to fare considering the difficult end to 2014. The unfavourable market conditions followed in 2015. The prediction that this was going to be a challenging year for fund managers who were managing global sukuk funds due to the strengthening of the US dollar was spot on.
February — Next, we spoke about investing in shariah-compliant products and I shared the process I went through to achieve this goal. I am happy to report that I am happily invested in a few shariah-compliant investment products and the returns have been satisfactory. I am exploring a few more products to add some diversification to my investment portfolio. It is never good to put all your eggs in one basket. Having diversification will help you manage the risk better.
March — I discussed the different dimensions of shariah-compliant products. Some product managers in the market have stepped up their game by providing both shariah and ethical elements in their products. An apt time to explore and tap into the space of shariah-compliant funds that will also actively participate in the remedial process of our current climate change problem. With the recently concluded climate accord in Paris, the timing was perfect.
April — The subject of Islamic real estate investments were discussed. The difficult equity and fixed income markets have led many investors to consider investing their money in an Islamic REIT because of the lower risk and steady long-term income. We will see the increase in this asset class in 2016 with a variation of offerings that will include, among others, student accommodation, logistics properties and farm assets.
June — This article discussed the merits of takaful. The takaful industry continued its upward growth trend. The offering of more products in the market has led to greater adoption of takaful by consumers. From my personal standpoint, I am very satisfied with the number of takaful products that I have subscribed to.
July — This article was very special to me as it detailed my personal journey towards owning my dream house. I shared my high and low points and they apparently struck a chord with many people because I have received loads of feedback from readers of this column. The journey towards owning your own house can be a very spiritual journey filled with joys and frustrations. Being able to connect with many people who shared their “war” stories with me was very fulfilling. For those who got in touch with me, I am very happy to know that my little column has helped you in one way or another.
August — Angel investors was the flavour of the month. Surprisingly, many readers were not aware that shariah-compliant investors could come in at a very early stage. I sincerely hope that by sharing this fact, many more shariah-compliant angel investors will come on board to support our burgeoning start-up community. Our entrepreneurs need a steady source of capital and if we can provide them with an option to get early stage shariah-compliant capital, it will be another feather in the cap for the Islamic finance industry.
September — I shared my wish list for shariah-compliant investment products that are currently not on the market. Shortly after that, it was announced at the World Islamic Economic Forum that Maybank Asset Management Group would launch an Asean Shariah Compliant Infrastructure fund in the early part of 2016 to provide investors the benefits of access to infrastructure investment opportunities in emerging markets such as the Asean economies, India and China through a pooled fund, which is a first of its kind. It will be interesting to see how this fund will promote regionalisation growth of shariah products in Asean and beyond.
October — Crowdfunding was the subject of this article, and it has indeed came to the fore. It is the buzzword in the industry now. Many different versions are being worked on and there is a bigger acceptance in the market from investees. Raising funds from a crowdfunding platform is now as normal as walking into a financial institution to apply for financing. I am hopeful that shariah crowdfunding will become the catalyst to launch more shariah-compliant companies in the market which will serve the best interests of shariah-compliant investors in the various stages of business.
November — Last month, I discussed the Investment Account Platform product. In principle, it is very similar to crowdfunding but with more sophistication and risk management elements built into it through the participation of the banks, which provide the source of the deal flows and the analysis of credit. This concept was conceived in Malaysia but has enormous potential to be applied on a global scale. It will be another contribution from the local Islamic finance industry to the global one.
I had a blast writing for this column and look forward to writing more articles next year. Until we meet again, I bid you adieu! Have a Happy New Year!
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