Electronic transactions and Brexit concerns
It was a great start to the new year with Pakistan Mercantile Exchange and Dubai Financial Market respectively rolling out an electronic Murabahah transaction and some new Murabahah measures, with the hope of increasing their Islamic finance markets and leasing opportunities.
Similar types of Islamic financial tools have been recommended for short-term purchases in North America. Inventory and auto finance transactions lend themselves well to this product, but it is advisable to look at other Shariah compliant tools for long-term real estate transactions.The Jordan Times reports that the real estate market in the country dropped a whopping 14% in 2017. Although there might be some Islamic leasing experts that see dark clouds on the horizon, other experts will see these numbers as cyclical. For example, registration in the northern region of Amman was fi rst with a volume of JOD1.26 billion (US$1.77 billion) — this indicates that the overall fundamentals for Islamic leasing are still in good shape. However, there were some surprises in the report when you look deeper to fi nd out who was investing in the Jordan real estate.
Iraqis accounted for almost half (49%) of the foreign investment while Saudis came second with 20% followed by Syrians with 6%. Although there was a big dip in the real estate market and by proxy Islamic leasing last year, the fundamentals for foreign investment appear strong.
The UK’s prime minister, Theresa May, met with various financial and banking leaders including those with Shariah compliant products on the 11th January, according to reports by Reuters. The meeting was to get a good overview of the banking system status when the UK officially exits from the EU. One of the concerns is that Brexit will challenge
London’s status as the financial center of Europe and thousands of jobs will be in jeopardy. Some financial institutions have even made it clear that they are planning to move to the continent. Imam Qazi, a partner at Foot Anstey, was quoted in CityWealth.com as saying that there were six Islamic banks in the UK and 20 others that off er Islamic leasing and wealth products, more than
any other western country including the US.
Shoeb M Sharieff is the president and CEO of Ijara Community Development Corp.
He can be contacted at shoeb@ijaracdc.com.
