Islamic Investment Opportunity in India

The world's economic centre of gravity is gradually shifting from the established, wealthy economies of Europe, Japan and North America to the emerging economies like China, India and South East Asia, with China and India projected to be the largest economies of the world in the next 50 years. Improving macroeconomic fundamentals, higher disposable incomes, emerging middle class, low cost and highly competitive workforce, investment friendly policies and progressive reform processes are all likely to combine to make a strong case for India to have a larger share in the overall investment pie.

With this sound economic base and with hundreds of companies complying to the Shariah laws, India offers a large economic opportunity for Islamic investors, who follow Shariah investment and therefore can't invest in interest-based ventures or in Islamically unethical ventures like tobacco, alcohol, fashion, gambling, vulgar entertainment and conventional finances like banks and non-banking financial institutions.

Realizing the growing need of Islamic investments in India, the Indian government has recently taken a number of steps in this direction. First, a high-level committee appointed by the government to prepare India’s future financial structure recommended interest-free banking for inclusion of Muslims in the financial sector. The Report draws its significance from the fact that this is first time an Indian finance committee has said something on the issue, which hitherto was considered quite sensitive in political circles. This is a good sign for Islamic investments in India. Taking a cue from these gestures, Indian corporate have also started placing themselves to capitalise on this big opportunity.

PRINCIPLES OF ISLAMIC FINANCE

The most important principles on which the modern Islamic finance framework rests on:

1.       Prohibition of the payment or receipt of interest: Money itself is considered to have no intrinsic value-it is merely a store of wealth and medium of exchange.

2.       Prohibition of uncertainty or speculation: Everybody participating in a financial transaction must be adequately informed and not cheated or misled. Derivatives and debt financing is prohibited.

3.       Prohibition of financing certain economic sectors: Investment is forbidden in what are considered to be socially detrimental activities like gambling, pornography, alcohol, armaments, etc.

4.       Importance of profit and loss sharing: The investor and investee must share the risk of all financial transactions; and

5.       Asset-backing principle: Financial transactions should be unpinned by an identifiable and tangible underlying asset.

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Market Brief

Invest the Halal Way!!!

Pragmatic Wealth's Bi-Weekly Newsletter

Markets ended the Day, Week and the Month on negative note, primarily due to non-clearance of policies by the Union Govt. in the Parliament, corporate results below expectation, hail storm damaging the crops, earthquake in Nepal posing threats to Northern India, and selling off of equities by FII’s due to some retrospective tax and non clarity on tax issues were instrumental in bringing the markets down. The undertone for the market remains bearish with short and intermediate trend being down for quite some time now, however, the long term trend is still up and the Bull-run is intact.

Technically, market is trading below the 200 Days Moving Average of 8270 on the Nifty and that is not good news. More down side to the market appears to be a reality, though, in extreme short term, small throw-back rallies are not ruled out. The market internals (breadth) are extremely dismal with the ratio of 4:1, i.e. with every 4 stock, 3 stocks are declining. In terms of level, in the following week, if the market trades below 8140, it will straight away test 8065 on the Nifty registered on January 7^th, 2015, and below that it may swiftly test 7960, the low registered on 17^th December, 2014. These levels can act as outside support for the market. On the higher side, in the best case scenario, market may test 8350 to 8450 levels. Unless there is a drastic positive change in the fundamental scenario in the micro or macro environment, the markets will consolidate for a protracted period and decline further.

Investors are sincerely suggested to exit the weak and under-performing stocks in rallies and use declines to buy fundamentally strong shares from Healthcare, Information Technology, Consumers and Consumer Durable Goods and Auto Ancillary. 

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Contact Us at:

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-22-23001290 / 23007290/ 8108178683

E-mail: contact@pragmaticwealth.net

All about Investments

Invest the Halal Way!!!

Pragmatic Wealth's Bi-Weekly Newsletter

The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. It's actually pretty simple: investing means putting your money to work for you. Essentially, it's a different way to think about how to make money.

INVESTING IS A LONG TERM ACTIVITY

When you invest, you buy asset like shares, mutual funds, gold or real estate when it’s available at a bargain and wait till its price go up. You may have to wait for a long time, say 5 or 10 years to get a real appreciation for your invested funds. Hence, investing is a long term activity because you have to wait for your rewards.

OBJECTIVES OF INVESTING

Objectives or purpose of investing would be different for different people.  By choosing to finance your expenses, accumulate money, invest that accumulated fund and limiting the amount of debt – you can achieve most of your life’s goals. Normally, a person would invest with one or many of the following objectives in mind:

·         A Regular Income

·         Creation of wealth

·         Preserving one’s capital

·         Planning for retirement life

·         Education /marriage of his children.

·         To start a business

THE PROCESS OF INVESTING

The process of investing is quite simple- Depending upon the amount money you have, you will have to short list the type of asset suitable for your investment. Next, you’ll have to gather knowledge of that particular asset category in which you are planning to invest your money in. This assessment will tell you whether you are choosing the right asset class for investment, or is it the right time for investment. Once you gain enough knowledge, try to draw a plan to invest systematically – get access to the right information, plan properly and make the right choice.

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Contact Us at:

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-22-23001290 / 23007290/ 8108178683

E-mail: contact@pragmaticwealth.net

Market Brief

Invest the Halal Way!!!

Pragmatic Wealth's Bi-Weekly Newsletter

It was a pathetic week for the markets and it had a dismal close, Nifty down by 300 points that is about 3 and a half percent. The market internals (breadth) were very poor and almost 4 out of 5 scripts corrected by about 5-10 percent. All this happened on the back of domestic turmoil, below normal rain forecast, failure of Union Govt. to clear Land Form reforms, farmer suicide woes, and poorly reported corporate earnings led to this corrective action. However, market in terms of Nifty, held the very crucial level of 8240 which was the low registered in March 2015 and incidentally being 200 DMA (Moving Average). May be market is in search of some positive news flows to bounce back.

Looking at the market moves and the internals, it appears that markets will remain volatile and choppy. On the back of any positive news flows, markets could attempt a pull-back rally, perhaps would test the crucial resistances of 8450 to 8550, but it can come out of the woods only if it manages to close above 8700, until that markets will be in the control of the bears. Market is so vulnerable and frail in short to intermediate term that any bad news from here on would see the down-side and in that event market would test the low of this year of 8060 registered in January. The fall would get accentuated if the Nifty closes below 8000 and we should be prepared for a protracted correction in the market.

Under these market conditions, investors should remain cautious, and as earlier suggested exit from fundamentally weak and high debt leverage companies in the rally. Since the market is in a long term bull markets, long term investors can use deep declines to buy well managed growth companies.

For Bi-Weekly Newsletter of Pragmatic Wealth Management Pvt. Ltd. Click Here

Contact Us at:

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.

Head Office:

102, 1st Floor, Topaz Society,

Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-22-23001290 / 23007290/ 8108178683

E-mail: contact@pragmaticwealth.net

Islami Tijara - India's Premier Islamic Finance Magazine

For further communication, contact us at:

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
Head Office:

102, 1st Floor, Topaz Society,
Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-22-23001290 / 23007290/ 9594932488 / 8108178683
E-mail: contact@pragmaticwealth.net