Web Offering of Shari`ah-Compliant Financial Products and Services Gives 140 Million Muslim Investors Ability to Invest On-Line
New York and London, April 3, 2001 – The world’s first regulated, financial services web site to offer financial products and services compliant with Islamic law was unveiled today in Dubai, United Arab Emirates. The site, http://www.iHilal.com, makes it possible for Muslims worldwide to purchase Shari`ah-compliant stocks and mutual funds.
Islamic investing is governed by the Shari`ah (Islamic law). These principles require that an investment must be in “ethical sectors”, ie. profits cannot be made from prohibited activities such as alcohol production, gambling and pornography. Also, investing in interest (riba) based financial institutions is not allowed. 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 is designed to reach middle income Muslims around the world who are interested in on-line investing, which the company believes is a fast growing market segment. Overall, the potential market for Shari`ah-compliant financial products and services is estimated to include 140 million Muslim investors worldwide, with current investments of approximately US $175 billion and a projected annual growth rate of 15 percent, according to the Bahrain Institute of Banking and Finance.
Accenture Technology Ventures and Rasmala Private Equity Group provided the seed capital to create iHilal.com. “iHilal fills a significant need in the global financial services marketplace,” said Cherine Chalaby, General Partner, Accenture Technology Ventures. “iHilal’s experienced management team, combined with its powerful and scalable business model, made it a compelling investment for us.”
“Investors throughout the Muslim world want credible financial products and services that comply with the teachings of Islam,” said Ramzi Abu Khadra, CEO of iHilal. “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.
To ensure that all products and services offered through iHilal strictly adhere to Islamic law, the company has appointed two internationally renowned Shari’ah advisors – Sheikh Nizam Yaqoobi and Sheikh Yusuf Talal DeLorenzo – as advisors. Both scholars are members of the Dow JonesSM Islamic Market Index Shari’ah Advisory Board. In addition, iHilal.com has entered into a licensing agreement with Dow Jones Indexes, to create a unique Islamic Stock Filter based on the Dow JonesSM Islamic Market Index screening process.
iHilal’s stock trading service will not permit un-Islamic transactions, including options trading and interest-based transactions, such as margin trading and short selling. The technical architecture for the online stock trading service was developed by Online Brokerage Solutions, Inc., a leading provider of internet trading solutions.
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).
Other financial products and services under development by iHilal include Islamic liquidity management accounts, Islamic insurance, Islamic mortgages and pensions, as well as foreign stock market coverage, stated Pervez Said, Head of Global Marketing and Business Development of iHilal.
iHilal is regulated as a broker dealer in the United States by the National Association of Securities Dealers. In the United Kingdom iHilal is regulated by the Personal Investment Authority and offshore by the Guernsey Financial Services Commission. “We believe that in striving to meet the strict standards imposed by the regulators the ultimate beneficiary will be our customers,“ stated Abu Khadra.
“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,” concluded Ali Samir al Shihabi, Rasmala Managing Partner and iHilal Chairman.
iHilal.com was established in March 2000 as a joint investment 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, Dubai (Dubai Internet City – the world’s first free trade zone for IT and e-Business), and Minneapolis, US.
About Accenture Technology Ventures and Accenture
Accenture Technology Ventures is the venture capital unit of Accenture, a US $10.3 billion global management and technology consulting leader. Accenture Technology Ventures helps talented entrepreneurs build great companies that can transform entire industries, create new markets and ultimately generate superior economic returns. The company’s portfolio includes more than 50 innovative companies that are building key components of tomorrow’s infrastructure and improving the way the world works and lives. iHilal.com is Accenture Technology Ventures’ first investment in the Middle East.
Accenture is a $10.3 billion global management and technology consulting organization. The firm is reinventing itself to become the market maker, architect and builder of the new economy, bringing innovations to improve the way the world works and lives. More than 71,000 people in 46 countries deliver a wide range of specialized capabilities and solutions to clients across all industries. Under its strategy, the firm is building a network of businesses to meet the full range of client needs – consulting, technology, outsourcing, alliances and venture capital. Accenture’s home page is http://www.accenture.com.
About Rasmala Islamic Finance Ltd.
Rasmala Islamic Finance Ltd. is a subsidiary of the Rasmala Private Equity Group, a consortium that includes Deutsche Bank, Saudi American Bank (a CitiGroup affiliate), the Arabian General Investment Company (AGICO), together with a group of prominent institutional and individual investors from Saudi Arabia. The company has undertaken a number of direct investments in the Middle East’s financial services and technology sectors.