On Shariah-compliant Investments: Interview with Managing Editor of Halal Universe

Sep 27, 2013 | Civilisation, Columnist, English, Singapore

Ms Hamisah Samad is the founder and managing editor of Halal Universe, a news portal focused on Shariah-compliant investments for retail investors, the first ever portal of its kind in the world. Halal-U.com has received more than 6 million hits since its official launch in November, 2012, with top viewership coming from Singapore, Australia, the US and Malaysia. Prior to Halal Universe, Ms Hamisah was with Debtwire Asia, a global fixed income intelligence service for investors and advisors, where she pioneered the coverage of private equity sponsored multi-billion dollar leverage buyout deals across Asia, Thomson Financial and Dow Jones Newswires Commodities News Desk. The Columnist speaks to Dow Jones’ Commodities Queen on the current Shariah-compliant investment trends and financial literacy of the Islamic community.

TC: What are the main trends you see in Shariah-compliant investments?

Hamisah Samad (HS): There is certainly an increasing awareness about Shariah-compliant financing and investments today compared with just a few years ago among the general public. We’ve had people coming up to us and say, “How and where do we begin? Where can we find information on halal investing?” In the past when you mentioned “Halal” it was almost always associated with food. And this increasing awareness is seen amongst people of different faiths – not just Muslims – and cuts across the board from the rank and file to the high net worth individuals. On the supply side, there are few product providers in Singapore thus far but we know that they are working with the authorities and making efforts to come out with more consumer financing products. There are also a number of asset management funds making efforts to introduce funds into Singapore. Recently, US-based Franklin Templeton launched a suite of their Shariah compliant funds to Singapore and Amanah Mutual Berhad Malaysia did the same just a couple of weeks ago.

TC: What is the current adoption rate of Shariah-compliant investment like?

HS: If we are talking about Singapore, the take up rate of the products is growing steadily, albeit still low. There are a myriad of reasons for this. First, many of the products were launched only recently and still need time to gain traction. Whilst there is increasing awareness, the awareness level is still poor. And amongst those who are now aware, they are still seeking information and education and I’d like to think carrying out “due diligence” on these products. The majority of consumers in Singapore grow up with conventional banking and investment products. Making the switch to Shariah-compliant products can be a daunting move. On the flip side, product providers could do a lot more to promote their products.

TC: What are the main needs of the Islamic investor now? How are the existing institutions addressing their needs?

HS: Different segments of the investing market would have different needs. And it also depends on how you define an Islamic investor. An Islamic investor in the true sense of the word would need products that allow him or her to lead the Islamic lifestyle; he or she not only wants investment products that allow him or her to grow and accumulate their wealth, but would need Islamic insurance for protection, non-interest based mortgages, other consumer financing products and services that would assist in distributing his or her wealth after a person’s passing. He or she would need a suite of products that allow him or her to lead the Islamic lifestyle. What we have today in Singapore is still somewhat patchy – our neighbours Malaysia and Indonesia are way ahead in their product offering – but this is to be expected of any nascent industry.

TC: What do you think are the limitations faced by the Islamic retail investment sector and what do you think they should do to overcome the limitations?

HS: There are certainly many challenges, but no limitations, no boundaries. A major challenge would be to increase the level of understanding in the market of what constitutes Shariah-compliant investing and the importance of investing the Shariah-compliant way. There are already a number of organisations doing this and this is also where Halal U as a media that focuses on Shariah-compliant investments wants to play a big part – to contribute to the uplifting of the community’s financial literacy via our news portal, our events and our courses.

TC: Is it possible to have a full Shariah-compliant investment strategy or risk management approach? What do you  think may be the challenge with that strategy or approach?

HS: Halal Universe, or www.halal-u.com, is not a financial advisory firm and we do not dish out advice on investments, investment strategies or personal financial planning. FAiWA, Financial Alliance’s Islamic Wealth Advisory division said during a recent talk that following Franklin Templeton’s launch of its Shariah-compliant global sukuk fund to investors in Singapore, it is now possible to construct a 100% Shariah-compliant investment portfolio in accordance to an investor’s risk profile.

Halal-U.com publishes news and market intelligence on a wide spectrum of investment asset classes that fall under the Shariah-compliant space for the retail market, including equities, REITs/real estate, gold, unit trusts, consumer finance, private equity and Islamic insurance.

Halal-U.com publishes news and market intelligence on a wide spectrum of investment asset classes that fall under the Shariah-compliant space for the retail market, including equities, REITs/real estate, gold, unit trusts, consumer finance, private equity and Islamic insurance.

TC: What made you start the Halal-U.com website?

HS: It stems from the desire to give back to the community and my strong belief that the non-interest based financial system is compassionate and the way forward for humanity.

TC: What is your vision for the website? Where do you see this going?

HS: I’d like to grow halal-u.com to be the “go-to” portal for the global Shariah-observant investors and the brand Halal Universe to be synonymous with quality and solid content.

TC: What’s your investment strategy or approach?

HS: In the family, I am the risk-taker, while my husband is a little risk-averse. Even so, given the age group in which we are in, ours is a well-diversified portfolio that includes Shariah-compliant blue chip stocks and non-Shariah compliant funds. I am in the process of looking into the recently introduced Shariah funds with a view to switch into these funds. We have a medium to long term investment horizon and in the process to build sources of passive income that we could rely on when we retire, insyaAllah.

TC: How would you describe the future of Islamic retail investment?

HS: It has a tremendous upside. The retail industry in Singapore is still embryonic.  There’ll be more consumer financing products introduced by banks such as auto financing and Islamic debit cards. I am hopeful that one day, there’ll be a cooperative that offers non-interest based mortgages and ar-Rahn, an Islamic pawn shop. Also, that the Asia Region Funds Passport (ARFP), a framework that allows the cross-border offering of funds, will take off and have more signatories from among the APEC countries. On the demand side, I see more and more people of different faiths seeking ethical investments and there’ll be more demand coming from within a more conscious and more aware Muslim community.  The regulatory framework will be more amenable to the growth of the industry.

This interview was conducted for The Columnist, a newsletter by Consulus that offers ideas on business, design and world affairs. The views expressed in this article are those of the interviewee and do not necessarily reflect the views of Consulus.