It was a rainy Sunday, arguably the coldest rainiest Sunday, since this year’s summery spring hit Canada. Nevertheless, my curiosity was too insisting, so I packed my baby’s diaper bag, kissed my puppy goodbye and dragged my husband for quite a drive to Toronto halal food festival.
With weather like that, the turnout will for sure suffer, I thought. So I was in disbelief when it took us 15 minutes to find a parking spot. I can already see the big crowd at the entrance. These people are serious about halal lifestyle. Once inside, my smell sense was at peak performance with all the great food showcased but my eyes were vetting the booths trying to locate some sort of Islamic Finance presence. And sure enough, there they were.
Present at the event, were fully fledged Islamic institutions, offering Islamic financial products only and Islamic windows of big investment houses. This is a good sample of institutions representing Islamic Finance in Canada. After engaging in very productive discussions with each and everyone of them, I noticed some strikingly similar practices, business focus, enthusiasm and issues plotting the landscape of Islamic Finance in Canada at the retail level:
- Demand is increasing, a lot: unanimously, they all enthusiastically talked about how very busy they have been throughout the festival and at their respective institutions. Awareness is strongly rising and demand is following suite.
- Market concentration: So far, Islamic finance clients and interested potential clients are Muslims. As per Statistics Canada, the Muslim community is rapidly growing in Canada, the majority of Canadian Muslims being in the province of Ontario. At the last census (2001), Muslims in Ontario accounted for 61% of all Muslims in Canada. Following is the province of Quebec which is home of most North African immigrants. So naturally, that’s where the institutions are concentrating their marketing efforts with a few expanding to reach all the way to the province of British Columbia!
- Product offering: The most popular product is hands-down real estate, be it residential or commercial. Currently, clients’ demand is driving the product offering; however awareness is definitely on the rise regarding Islamic Mutual Fundsand Shari’ah compliant securities. The general practice is to pick securities from different Shari’ah compliant indices, particularly US ones, such as Dow Jones Islamic Market Indices.
- Knowledge of Islamic finance: The technical knowledge of Islamic finance is, for the most part, basic. This is not surprising given the position of Islamic finance in Canada so far.
- Marketing strategy: So, how do those institutions get their clients? They go to the source. Just like what they were doing at the Halal Food Festival, they get their clients at events targeting Muslims, Islamic centres, mosques ect. Some organize their own conferences and seminars about Islamic financial products keeping the events advertising amongst Muslim communities and mostly relying on the word of mouth.
So you notice right away what areas are requiring some work in order to take Islamic finance in Canada to the next level. Tackling some issues first, will naturally improve and directly help address others, like:
- Knowledge will help address product offering and diversification.
- Use of mass marketing tools will help unlock the potential of Islamic finance market in Canada.
- And all will only feed into creating a buzz and therefore building momentum.
Bottom Line: It’s looking good! Islamic finance is present in Canada is more that you would think. It is happening, quietly. Islamic finance in Canada is in the calm before the storm.
About the Author
Loubna Benslimane – CDIF :Founder of Islamic Finance ResearChat (www.islamic-finance.ca) the 1st Canadian media providing information on Islamic Finance.
Loubna’s interest in Islamic finance started about a decade ago and since then she has been closely watching its evolvement and extensively analysing its stupendous global growth and reach. To give her expertise more structure and make sure she covered all areas of Islamic finance, she completed CIMA (Chartered Institute of Management Accountants, UK) Diploma in Islamic finance. Loubna’s mission is to provide easy to understand information about Islamic finance particularly to fellow Canadians and then to the rest of the globe.
She’s very social, so don’t forget to follow her on:
Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT
(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.
Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”
UK exposure to a rise of one percentage point across all interest rates was 25 billion pounds ($34.83 billion) a year to the government’s cost of servicing its debt, Sunak told FT.
“That (is) why I talk about leveling with people about the public finances (challenges) and our plans to address them,” he said.
The government has already spent more than 280 billion pounds in coronavirus relief and tax cuts this year, and his March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown.
He is also expected to announce a new mortgage scheme targeted at people with small deposits, the UK’s Treasury announced late on Friday.
Additionally, the government will also announce a new 100 million pound task force to crack-down on COVID-19 fraudsters exploiting government support schemes, it said.
(Reporting by Bhargav Acharya in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)
G20 promises no let-up in stimulus, sees tax deal by summer
By Gavin Jones and Jan Strupczewski
ROME/BRUSSELS (Reuters) – The world’s financial leaders agreed on Friday to maintain expansionary policies to help economies survive the effects of COVID-19, and committed to a more multilateral approach to the twin coronavirus and economic crises.
The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.
“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after the videolinked meeting held by the G20 finance ministers and central bankers.
The United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies through lockdowns.
But despite the large sums, problems with the global rollout of vaccines and the emergence of new coronavirus variants mean the future path of the recovery remains uncertain.
The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.
The meeting was the first since Joe Biden – who pledged to rebuild U.S. cooperation in international bodies – U.S. president, and significant progress appeared to have been made on the thorny issue of taxation of multinational companies, particularly web giants like Google, Amazon and Facebook.
U.S. Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.
“GIANT STEP FORWARD”
The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.
Scholz said Yellen told the G20 officials that Washington also planned to reform U.S. minimum tax regulations in line with an OECD proposal for a global effective minimum tax.
“This is a giant step forward,” Scholz said.
Italy’s Franco said the new U.S. stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.
The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.
On this front there was broad support for boosting the capital of the International Monetary Fund to help it provide more loans, but no concrete numbers were proposed.
To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by Trump.
“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.
While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.
The recovery is fragile elsewhere too. Factory activity in China grew at the slowest pace in five months in January, and in Japan fourth quarter growth slowed from the previous quarter.
Some countries had expressed hopes the G20 may extend a suspension of debt servicing costs for the poorest countries beyond June, but no decision was taken.
The issue will be discussed at the next meeting, Franco said.
(Additional reporting by Andrea Shalal in Washington Michael Nienaber in Berlin and Crispian Balmer in Rome; editing by John Stonestreet)
Bank of England’s Haldane says inflation “tiger” is prowling
By Andy Bruce and David Milliken
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.
In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.
Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.
Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.
But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.
Haldane’s comments put him at the most hawkish end among the nine members of the MPC.
Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.
“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.
(Editing by Larry King and John Stonestreet)
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