Sunday, February 15, 2009

Indian money managers warm up to Shariah banking as cash flow dries up

Money managers in India have begun launching Shariah-compliant funds, hoping to tap the country's large Muslim population, the world's third-biggest after Indonesia and Pakistan. The push toward the new funds comes in the wake of dwindling cash flows into more traditional investment channels, which have been hit by a stock market slump and slowing economic growth, reports Reuters.
In January, the report said the portfolio management services unit of HSBC's Indian fund arm started offering a Shariah product, and recently Mumbai-based Benchmark Asset Management launched India's first exchange-traded Shariah fund. "There is a need gap... for investment products that are Shariah-compliant," said Vikramaaditya, chief executive of HSBC Asset Management. Zafar Sareshwala, chief executive of Mumbai-based Islamic brokerage Parsoli, said Shariah-compliant funds could easily raise US$1 billion from millions of potential Muslim investors.

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