Noor Investment's global expansion plans 'on hold'

by Rebecca Bundhun
Noor Investment Group LLC on Tuesday announced the launch of its new Islamic insurance company, Noor Takaful, but admitted the global financial crisis has forced the group to put ambitious international expansion plans on hold.

“We have put on hold some of our ambitious plans to go abroad,” said Noor Investment Group’s group chief executive officer, Hussain Al Qemzi.

“However, our plan of expansion in the UAE is still continuing,” he said. “We are focusing on our market, consolidating what we have”

The comments were made at the launch of the group’s new Shari’ah compliant insurance products, exactly one year after the launch of Noor Islamic Bank.
“The launch of Noor Takaful comes at a difficult time in the global economy. However, this launch demonstrates our confidence in our local economy,” Al Qemzi said.

The takaful (Islamic insurance) products will be offered through Noor Takaful Family and Noor Takaful General to individuals, businesses and corporate clients.

There is growing demand for such products in the UAE and GCC region, according to Noor Investment Group.

They will initially operate from four locations in the UAE - in Abu Dhabi, Dubai and Sharjah - but the group is aiming to expand the reach of the companies across the Middle East and North Africa.

Islamic investments could weather financial storm

Sharia compliant investment strategies should not be discounted despite a challenging third quarter, US asset manager SEI said in a report on Wednesday.

Islamic investments faced headwinds in the third quarter as commodity and energy prices dropped sharply and financial stocks rallied, but are still outperforming the market in the year to date.

The third quarter of this year saw dramatic falls in commodity and energy prices whilst financials rallied amid a backdrop of bailouts.
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This weighed on sharia compliant portfolios, which are usually heavy on the commodity and energy sectors and do not include financial stocks.

Islamic law prohibits fixed interest rates and trade with companies dealing in alcohol, pork or pornography.

But Islamic investments will remain sheltered from the worst ups and downs of the financial crisis, SEI analyst Jahangir Aka said.

“The exclusion of the financial sector and an aversion to debt continues to hold Islamic stocks in good position to avoid the credit squeeze. These attributes have created a resistance to the current crisis, though they can not insulate completely,” he said.

The Dow Jones Islamic Index (DJII) has outperformed the broader markets by 2.98 percent since the beginning of the year, but underperformed by 2.17 percent in the third quarter.

“Should commodities, materials and energy pick up over the next quarter and beyond, we would expect to see sharia indexes recover from the Q3 slow down,” he said.

He noted that a falling real estate market could be a concern for the Islamic banking sector.

“There are principles and approaches in the Islamic finance system that could be leveraged, however sharia finance can not purely replace conventional. They are inherently two different systems that co-exist,” Aka said.

Source : Arabian Business