Islamic Finance is a big new area of interest for banks and financial services. Not only does it offer opportunities for new products and services, but it is also one of the fastest growing areas of finance. Despite the global economic slowdown, analysts estimate that the market for Islamic assets will grow by 10 to 15 percent in 2009. While this is not as fast as the 20 to 30 percent growth experienced in 2008, it nonetheless is an important opportunity for banks, particularly in Hong Kong. Hong Kong has made a point of being an attractive destination for investors and marketing participants of Islamic Finance.With a worldwide market size of US$400 billion and no clear leader in the market for Islamic Finance, Hong Kong stands to gain considerably from boosting its market presence, infrastructure and capabilities in this area. While Dubai, Kuala Lumpur and London all have sizeable markets for Shariah products, no one can claim global leadership in Islamic Finance. And with over 1.6 billion Muslims in the world, this is an important and growing market that no financial center can afford to ignore. Islamic law (Shariah) prohibits taking or giving interest (Riba) which is the most essential feature of Islamic banking. Because of this, other approaches such as profit-sharing and fee-based financing have developed to comply Shariah laws.These special modes of financing have emerged in retail, private and commercial banking for debt and capital markets, insurance, asset management, structured finance, project finance, derivatives, and other areas. To capture this opportunity, it is important that market participants in Hong Kong are well-trained and properly versed on the intricacies of Islamic Finance.Broadly, Shariah investing prohibits taking or paying interest (Riba), speculative transactions or gambling (Masir), selling something with uncertain contract terms or which you do no own (Gharar), and investments in businesses that have non-Islamic behaviors (such as businesses dealing in alcohol, drugs, gambling, weapons, and so on). Financial services companies that want to get into the Islamic Finance market need to ensure that their staff members are trained on the fundamentals of:Bai’ al-inah- sale and buy-back
Bai Ad-Dayn – sale of debt
Ijarah – leasing
Istisna – contract of exchange with deferred delivery
Mudarabah – profit sharing
Musharaka – equity participation
Murabaha – cost plus
Sukuk – Shariah compliant bonds
Takaful – Islamic insurance
Jualah – service charges
Kafalah – guarantee
Qard – loans
Wakala – AgencyIn addition to developing domestic business, Hong Kong can be seen as a gateway to China for Islamic Finance. With the large number of petrodollars and Chinese sovereign funds looking for investments, the creates a unique opportunity for Hong Kong (which is the fund-raising platform for Chinese companies outside of the China).Hong Kong has already developed financial products that are Shariah compliant and has several tracker funds and exchangeable sukuks in its markets. While proven structures will continue to flourish in a the Islamic Finance market, there are signs that some of the more sophisticated originators and investors are looking for more value-added and innovative structures. As a center for financial innovation in Asia, Hong Kong is well-positioned to capture this opportunity.However, my analysis shows that Hong Kong’s banks and financial services firms do not have the human capital, skills or knowledge to truly engage in the Islamic Finance market. Banks should therefore invest in broad-based employee training initiatives so that their staff understands the market opportunity and potential approaches to Islamic Finance. This can only be done if top leaders truly believe in the potential for Shariah compliant products and embrace effective training as a way to drive change.
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Off-Market Properties: Just One Gem You’ll Discover Through a Quality Real Estate Coaching Program
You’ve seen the success stories and read how someone, just like you, went through a real estate coaching program and now has a thriving investment business. They did it, and so can you, right? But then you see the news that announces the constant changes in the market and the thought of the venture scares you.You watch as formerly vacant homes in your neighborhood are bought, fixed up, and sold quickly. But then there are the homes that just sit. They have all the same improvements and the beautiful exteriors but they still sit vacant.What do some investors possess that makes them successful, when other investors have all the same intentions and drive but they are left with inventory that doesn’t sell? Why is one failing and how is the other making money in real estate?If you could be the proverbial fly-on-the-wall you would see the difference between the two investors is a simple as the process they follow. The success story got solid, real-world training to develop a process and strategy that works. They’ve got contacts and mentors who help them understand challenges and opportunities as the market changes. The other investor is probably going it alone. Without a system, this guy may be handling each sale or purchase differently, not following a process, pretty much just flying by the seat of his pants. Property investment is a business; it involves major financial decisions, and it requires a battle-proven and solid plan.One of the most effective strategies you can pick up in the right coaching program is how to go after properties that aren’t even on the market. The competition is far weaker in a field where nobody else even knows a game is starting.Off-market properties include: vacant properties, foreclosures and sale by owner. Even without being listed, these eager sellers attract a lot of attention from investors. In fact, it’s not uncommon for them to be wined and dined by every investor in a 30 miles radius. You need to catch their attention and turn a contact into a contract. An owner of a foreclosure is often terribly stressed and just wants a safe exit from a horrendous situation. They want to know they’re getting the best terms possible, and above all they want to have confidence in the investor they choose. That person can be you.To be the one they choose you need to follow this sage advice: “Be Prepared.”Here are two ways you can put these prospects at ease with a little advance preparation:1. A consistent message.Create a presentation that will let your future sellers or owners know what you can provide for them. It could be a simple PowerPoint presentation you show them in person on your laptop or tablet. The presentation could be part of your scripting if you’re talking with your leads on the phone. Get your scripting down, work on it so you don’t sound like a bored telemarketer, and brainstorm so that you have answers for all possible questions.2. Let others vouch for you.Get testimonials from those you have done business with: have them write letters or better yet start your own YouTube channel and publish their video testimonials. People like to do business with those they know, like, and trust. Having testimonials from others you’ve served will go a long way toward helping new prospects feel at ease doing business with you.Get these preparations in order, then get busy. Start by building a target list of prospects. That can be as easy as browsing the local rental section of Craigslist. You may find sellers as you come across owners who no longer want to be landlords. They may be eager to discuss the possibility of you purchasing their property. On the other hand, you may find buyers as you encounter owners who love owning property and want to add to their inventory.Either way, your preparations will go a long way toward making you successful with off-market properties. One of the most powerful lessons you’ll learn in a good coaching program is this simple mantra: Keep it Simple: Prepare, Plan, and then Proceed.