Unveiled in Dubai at the beginning of this month was a new regulated, financial services website offering financial products and services compliant with Islamic law, the Shari'ah. The site, www.iHilal.com, allows Muslim investors worldwide to invest online in stocks and mutual funds. iHilal is designed to reach middle-income Muslims and the company believes the potential market for Shari`ah-compliant financial products and services amounts to around 140 million Muslim investors worldwide.
According to the Shari'ah, investments must be in ethical sectors, that is to say profits cannot be made from prohibited activities such as alcohol production, gambling and pornography. Additionally, all wealth creation should result from a partnership between the investor and the user of capital in which rewards and risks are shared.
iHilal.com is a joint venture between Accenture Technology Ventures, the venture capital unit of Accenture and Rasmala Islamic Finance Ltd, a subsidiary of Rasmala Private Equity Group, a consortium including Deutsche Bank, Saudi American Bank (a Citigroup affiliate) and a number of prominent institutional and private investors. The company has offices in London, Guernsey, the Dubai Internet City and Minneapolis in the US.
Ramzi Abu Khadra, iHilal's chief executive, said: 'Investors throughout the Muslim world want credible financial products and services that comply with the teachings of Islam. Now, for the first time, Muslim retail investors have the ability to invest online in over 1,000 Islamically screened stocks (US, Canada and foreign companies), traded on US markets, as well as Shari’ah compliant mutual funds.' For UK investors, iHilal now offers Islamic mutual funds, and will seek approval to offer brokerage services in the near future.
iHilal has two expert Shari'ah advisors on hand to ensure that all products and services offered via the website strictly adhere to Islamic law. Its stock trading service will not permit un-Islamic transactions, including options trading and interest-based transactions, such as margin trading and short selling. Ali Samir al Shihabi, Rasmala Managing Partner and iHilal Chairman, said: 'We believe that iHilal has a solid business model, valuable marketing alliances, a unique infrastructure with both Shari’ah and regulatory compliance, as well as the technology and customer care that will make this business succeed.'
Investors with a preference for professionally-managed funds can access iHilal’s web site to view and invest in offshore and UK Islamic mutual funds from leading product providers, including SAMBA (CitiGroup affiliate), ORBITEX (US$17 billion assets management company) and National Commercial Bank (the largest bank in Saudi Arabia with the country’s highest assets under management in Islamic mutual funds). iHilal is currently developing additional financial products and services. These include Islamic insurance, mortgages and pensions.
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