AGL 40.20 Decreased By ▼ -1.30 (-3.13%)
AIRLINK 129.11 Increased By ▲ 1.11 (0.87%)
BOP 6.60 Increased By ▲ 0.34 (5.43%)
CNERGY 4.03 Decreased By ▼ -0.10 (-2.42%)
DCL 8.45 Increased By ▲ 0.01 (0.12%)
DFML 41.25 Increased By ▲ 0.56 (1.38%)
DGKC 87.00 Decreased By ▼ -0.90 (-1.02%)
FCCL 33.35 Decreased By ▼ -0.75 (-2.2%)
FFBL 65.90 Decreased By ▼ -0.43 (-0.65%)
FFL 10.54 Decreased By ▼ -0.02 (-0.19%)
HUBC 110.70 Increased By ▲ 2.00 (1.84%)
HUMNL 15.23 Increased By ▲ 0.77 (5.33%)
KEL 4.78 Increased By ▲ 0.13 (2.8%)
KOSM 7.83 Increased By ▲ 0.50 (6.82%)
MLCF 41.90 Decreased By ▼ -0.82 (-1.92%)
NBP 60.50 Decreased By ▼ -0.34 (-0.56%)
OGDC 182.80 Increased By ▲ 3.83 (2.14%)
PAEL 25.36 Decreased By ▼ -0.34 (-1.32%)
PIBTL 6.26 Increased By ▲ 0.20 (3.3%)
PPL 147.81 Increased By ▲ 1.66 (1.14%)
PRL 24.56 Decreased By ▼ -0.35 (-1.41%)
PTC 16.24 Increased By ▲ 0.10 (0.62%)
SEARL 70.50 Increased By ▲ 0.30 (0.43%)
TELE 7.30 Increased By ▲ 0.08 (1.11%)
TOMCL 36.30 Increased By ▲ 0.10 (0.28%)
TPLP 7.85 Increased By ▲ 0.01 (0.13%)
TREET 15.30 Decreased By ▼ -0.29 (-1.86%)
TRG 51.70 Increased By ▲ 1.34 (2.66%)
UNITY 27.35 Increased By ▲ 0.45 (1.67%)
WTL 1.23 Decreased By ▼ -0.01 (-0.81%)
BR100 9,842 Increased By 47.4 (0.48%)
BR30 30,036 Increased By 389.6 (1.31%)
KSE100 92,520 Increased By 499.1 (0.54%)
KSE30 28,786 Increased By 121.7 (0.42%)

Deutsche Bank AG's prime brokerage business is preparing to launch a sharia-compliant hedge fund platform within the next month, as part of its Middle East expansion plans, a senior official said.
Deutsche Bank will expand an existing service on a selective basis, regional head for Middle East Structuring Geert Bossuyt told Reuters, and the platform - or range of financial products - will offer techniques for hedge funds to adjust to Islamic investment rules.
"It is a bit like the case of the chicken and the egg, you will never have demand if there is no offer. So Deutsche Bank, and others, offer product," he said.
Deutsche will target existing hedge funds who want to run sharia strategies alongside their ongoing investment activities. It will follow the launch of Barclays Capital's Al Safi sharia-complaint platform in June and the launch last year of a similar product by Newedge, the broker platform joint venture of Credit Agricole's Calyon and Societe Generale.
Sharia-compliant transactions demand transparency throughout the investment process. Short selling is banned because it amounts to selling an asset not owned and risk management must accommodate the exclusion of certain types of derivatives because of their speculative nature. Bossuyt said the platform will offer "conceptual solutions" to hedge funds, advising on techniques to replicate traditional shorting, as well as screening of underlying equity and derivative transactions. The service has been approved by the sharia board of investment company Dar Al Istithmar, which is 55 percent owned by the German financial group.
The Islamic hedge fund industry is still at least two years away from reaching the tipping point where the product offering is large and sophisticated enough to make costs and returns very similar to its mainstream counterpart, Bossuyt said. "My estimate of the immediate flow is that it is not going to be great at the beginning. We are in a learning curve phase," he said.

Copyright Reuters, 2008

Comments

Comments are closed.