The advent of the Internet has opened up a wealth of opportunities for private investors and the number of brokers based in countries with favourable tax regimes is increasing all the time. Offering the privacy and discretion of traditional private banks, these operations are targeting a lucrative niche in the online investment world. This week saw the launch in the Cayman Islands of IslamiQStocks, a financial website aimed at helping Muslims better manage their financial affairs so that they do not breach Islamic law.
IslamiQStocks, which will be fully operational within the next six months, is actually UK-based but its holding company is based in the Cayman Islands. The company has screened more than 8,000 companies quoted on the London Stock Exchange and the three main US exchanges - the NASDAQ, New York Stock Exchange and the American Stock Exchange - to ensure that they conform with Islamic law, called the Shari'ah. This law prohibits Muslims from investing in companies involved in prohibited activities such as alcohol production and gambling. There are also restrictions that have a bearing on the balance sheet of potential investments. For instance, Islamic law prohibits usury, so companies with excessive interest income may be ruled out for Muslims.
IslamiQStocks.com is to team up with Towry Law International, part of the Towry Law Group, a financial services intermediary listed on the London Stock Exchange. Towry selected 18 of the world’s largest offshore Islamic investment funds, and these are included on the site. The site also offers real-time news feeds from AFX and S&P News, stock quotes from four major exchanges through S&P Comstock, US equities updates through CBS MarketWatch.com, and research reports compiled by Thomson Investors Network.
The chief executive of IslamiQStocks, Hasnita Hashim, says there are a number of wealthy Muslim investors with offshore funds looking to invest that cash within the boundaries of their religion. She estimates that with US$150 billion invested in the Islamic banking system and approximately 13 million to 15 million Muslims online worldwide, there is a key market to be reached. The company has applied for licenses to operate in the US and the UK and has formed alliances that will open the Middle East and Asia Pacific regions. She explained: 'The UK company is seeking to be licensed in the UK but what we can offer in the Caymans in terms of the funds cannot be offered to the UK and US investors.'
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