September 30, 2012 News: The head of a militant Bangsamoro youth organization has endorsed the plan of the Philippine Stock Exchange (PSE) in putting up $1.4 trillion in investible funds by offering Shariah-compliants stocks to 1.5 billion Muslims worldwide.
“This is a good idea and is long overdue.”
This was the statement of ArsadSolaiman, chair of the Youth for Youth for Genuine Bangsamoro Empowerment (YBGE), sent to Luwaran today.
He said that there is so much exploitation worldwide as a result of the advent of capitalism and other economic systems that favor the few and powerful at the expense of the poor and marginalized as well countries belonging to the third world.
PSE president Hans Sicat said the exchange is holding preliminary discussions with the National Commission on Muslim Filipinos (NCMF), the Asian Development Bank and financial experts from Indonesia on how the Philippines can take advantage of the growing market for Islamic finance.
“We’re in early days of our shariah-compliant project. We’re working with [NCMF] Secretary MeholSadain and experts from Indonesia, and the ADB. The idea is to identify and have shariah compliance certified according to standards to bring a different asset class. This should help bring in ethically focused investors, including Muslim Filipinos who currently invest in shariah-compliant Indonesian and Malaysian equities,” Sicat told reporters in Manila recently.
Shariah-compliant equities follow the Islamic law which does not allow investors to put money into firms that benefit from interest or the sale of goods such as alcohol, tobacco or firearms. They also steer clear of companies with large amounts of debt on their balance sheets and those whose business is related to gambling, meat and conventional financial services such as banking and insurance.
However, Solaiman gave an unsolicited advice to the PSE to subject first the concept of stock exchange to study by Islamic experts, saying there is so much speculation in this trading which is not in harmony with the spirit of Islam.
He said Islam prohibits not only interests, monopoly, hoarding, but also trading which are based on chance or speculation.
A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends.
Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.
Shariah-compliant investments are growing in popularity worldwide. Reports indicate that the worldwide Islamic finance market could reach $4 trillion by 2020 while the Muslim population is seen to increase 35 percent in the next 20 years.