The oil market is broken. Volatile prices are undermining global energy security and increasing geopolitical risk. Getting agreement for a production cut among the Organization of the Petroleum Exporting Countries is proving difficult, and would in any case be hard to enforce. Instead of looking to the so-called swing producers, there is an alternative solution: create a swing consumer. Or to put it another way, a “tactical petroleum fund”.The collapse in oil prices since 2014 has cost producers around $1.8 trillion a year. Rich oil exporters have cut discretionary spending and d...

Editor's Note: In this series of articles on IslamicBanker.com, Yoga Prakasa explores Islamic REITs as an investment asset for waqf management in Indonesia, with particular focus on regulatory framework and shariah-compliancy. Waqif (the party who part with its asset) has created awqaf (plural of waqf) since the time of the Prophet (pbuh). They are considered as avenues for waqif to obtain continuing religious rewards as the awqaf assets are to be maintained in perpetuity to fulfil the needs of the beneficiaries as intended by the waqif. [1] Traditionally in the past, waqif...

Markets are starting to feel post-traumatic stress once more as the looming DoJ fine of up to $14bn weighs on the share price and perceived credit-worthiness of Deutsche Bank.Some hedge funds are winding down exposures and risk departments are scratching their heads to figure out if this is another Bear Stearns, Lehman or a different beast entirely.The curious element here is that as opposed to being in our normal framework of the returns of a private company being determined by the Governance Regime and policies of its home country, Germany, the fate of the equity of Deutsche Bank i...

Last month I was able to reflect on events that had impacted positively on me and used the title of “Joining up the dots”. This month I would like to comment on an area that has been a concern of mine for almost as long as I have been engaged in Islamic Finance, which is now about a quarter of a century. The area is that of Education in Islamic Finance and I want to frame the discussion under the banner of “The Winds of Change.” As always, these are very personal observations shared from my own particular vantage point at this exact moment in time. So here goes!More...

As I write this article, hundreds of bright and energetic young minds are developing their ideas to catch the fintech wave. A trend that may be more popular in Western markets.One of the largest sources of funding for companies in developing markets is banking. However, banking penetration is not as deep as that in the more developed economies, due to limited infrastructure and awareness. This is where financial technologies can play an important role in bridging the demand and supply.Let's focus on Indonesia, a country with the largest Muslim population&nbs...

 For the origins of the process of revenue generation in modern sukuk, we need to go back to the Ottoman cash waqfs. This special waqf form has a long history and goes back at least to the fifteenth century. What made these waqfs special was the fact that they were established with cash capital and had to invest this capital in order to finance the charity for which they had been established. [1] If we carefully examine the process of investing the endowed capital of an Ottoman cash waqf, we discover the very essence of the modern sukuk al-ijarah.A typical Ottoman cash waqf inv...

Welcome and thanks for coming back to this page once again! I am writing this piece on the Friday morning of a week that has probably been the most fulfilling that I have ever spent during my 5 years at INCEIF. I will now spend the remainder of this article to try and explain why it has been so.During the last week we have not signed any major deals, we have not engaged in any significant new collaborations and we have not published any major books or pieces of research. So why do I call it the most fulfilling week in my 5 year tenure? Simply because there have been numerous examples where...

Insurance, no matter what kind, is pooling of risks and applying the law of large numbers. The peril will only affect a small portion of those whose risks are pooled. Hence, if our probability calculation is accurate, a small premium from every one in the pool will be sufficient to compensate fully the small portion who will suffer during the term of the policy [1].The problem with conventional insurance is that it creates an "exchange contract" between the insurance company and the insured in the form of "policy". It simply says: you pay a premium of $ 100, and you will be covered from th...

 Eid Mubarak!This month, after an Eid break and a family holiday, during which time I did a lot a background thinking, I thought I would reflect on the role of Women in Islamic Finance. To be honest, I do not consider myself to be an expert in this particular topic. However, I do have some relevant experience and, like anyone else, I am entitled to a point of view. Why did I choose this month to pick up on this subject matter? Plain and simple, I have been asked to give a presentation on the “Role of Women in Islamic Finance” at an assembly of participants of an organisa...

 Professor Humayon Dar wrote a recent post titled "Islamic Banking in India: Some Suggestions" with interesting points with regard to establishing Islamic banking & finance (IBF) that should be welcomed by the IBF sector in order to get the debate moving in establishing IBF foothold in India. To have a foreign technical board without Shariah scholars/Muftis due to sensitivities in secular India and to overcome the fears of the secularists and Hindu nationalists in India, as suggested by Prof. Dar's post, is understandable. However, there are a number points worth conside...