Business 24|7 reports that Connecticut-based Shariah Capital and Dubai Multi- Commodities Centre (DMCC) plan to boost assets under management in their specialized commodity funds to the “multibillion” dollar level in three years from almost $260 million now, senior officials said.

“Our plan is to make this a multibillion project within three years. We’re now ready to raise funds,” Eric Meyer, Chairman and Chief Executive of Shariah Capital, told Zawya Dow Jones in an interview.

DMCC, part of Dubai World, in a joint venture with Shariah Capital known as Dubai Shariah Asset Management (DSAM), launched a basket of four commodity-focused funds in 2008 and seeded the funds with $50 million each. DSAM develops and manages Shariah-compliant investment funds focused on commodities.

The DSAM Kauthar Commodity Fund, an equally-weighted fund of funds comprised of the four single-strategy commodity-focused funds, had total assets under management of $259 million as of January 31, 2010, DMCC’s Chairman Ahmed bin Sulayem said.

The DSAM Kauthar Commodity fund of funds was up 41 percent in 2009, with all single-strategy funds also in positive territory in 2009.

The Sharia Capital-DMCC joint venture is now in the process of partnering with banks and insurance companies in the Middle East, Europe and Malaysia to sell the funds, Meyer said, adding that the target is to secure 25 percent of the assets from Saudi Arabia.

Full story from Business 24|7 here: http://www.opalesque.com/IslamicFinance_Briefing/?p=6146

In the next few months, Saudi Arabia will move forward in pushing the frontiers of Shariah complaint lending/financing practices by issuing its first mortgage law. Bloomberg reports that the legislation will boost the real-estate industry and allow banks to diversify their balance sheets.

Apparently, Saudi Arabia’s property market is suffering from a shortage of housing units, shielding the kingdom from corrections in the real estate markets of other Gulf Arab states. Real estate prices in Dubai plummeted around 50 percent from their peak, according to Deutsche Bank estimates.

The Sharia-compliant legislation which has been discussed for the past two years will consist of five parts. It will define the terms of mortgages, how they are designed, how they are granted, how companies are licensed and how procedures will be enforced.

The legislation is on the way to the council of ministers before going to the Shura Council, the country’s consultative assembly, for final approval.

Full story, here: http://www.bloomberg.com/apps/news?pid=20601104&sid=afy6Vy3FViNg

Canada’s National Housing Agency has issued a report that Shariah-compliant mortgages would pose no legal problems, nor would other Islamic financial products. The 88-page study was done at the direction of Canada Mortgage and Housing Corp., by the assistance of Canadian law firm Gowling, Lafleur Henderson LLP.

“Islamic financial products should not present any particular difficulties under Canadian accounting standards,” says the study by the Canadian law firm Gowling, Lafleur Henderson LLP, released in late January.

Apparently, no Candadian chartered banks currently offer Islamic mortgages. The Canada Mortgage and Housing Corp. report says there would be no legal obstacles if private entities offered the financial services to Canada’s Muslim community, believed to number at least 700,000.

The Islamic mortgages would follow typically “diminishing musharakah” or similar installment-purchase models employed by Islamic financial instruments.

For the full story, click here: http://blog.beliefnet.com/news/2010/02/canadas-housing-agency-approve.php

Just when many of the world’s financial systems have been working to weather the capital market turmoil and its spread to economies around the globe, Islamic finance growth has stayed strong and will likely be brisk during the next year, said Standard & Poor’s Ratings Services in a report titled “Islamic Finance Is Likely To Advance In 2010 On Firm Growth And Widening Geographic Reach,” published today on RatingsDirect.  

“We believe Islamic finance has become a recognized and a specific segment of finance on its own with still-bright growth prospects. We think Islamic finance is set to make further inroads in developed Western markets while Southeast Asian countries will likely fuel the Islamic finance advance in Asia in 2010,” said Standard & Poor’s credit analyst Mohamed Damak.

“At the same time, though, we believe there are a number of important questions for which the answers are not necessarily yet clear but that may play a part in shaping the sector’s future growth. Specifically in non-Muslim countries, and especially in Europe, we consider they include the size of demand for Sharia-compliant products, regulatory and tax environments, the support of the political and financial communities, sovereign sukuk issuance, and the possibility of a common strategy for extending Islamic finance across EU countries.”

Assets of the top 500 Islamic banks expanded 28.6% to total $822 billion in 2009, compared with $639 billion in 2008, according to S&P.    For the press release click here: http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245205629399