Interest in gold from Islamic countries has soared since the Shariah standard for gold was introduced almost a year ago, opening the way for Muslim investors to put money into bullion and coins.
Last December the standard was approved as a collaboration between the globally recognised Islamic standard setting body - the Bahrain based Accounting and Auditing Organisation for Islamic Financial Institutions (Aaoifi) and The World Gold Council (WGC) in London. So what has happened since then?
"We have seen much more interest in gold from Islamic countries since the standard was launched in December 2016," says Natalie Dempster, managing director, central banks and public policy at the WGC. "We have had a lot of engagement with the advisory community, fund managers and product providers."
Although it may be surprising to many, Islamic law places special restrictions on gold investing.
Gold is a ribawi item, which puts in a special category of six items regarded as so important to daily life that they cannot be hoarded (the others being silver, dates, wheat, salt and barley).
To be Shariah compliant, ribawi items must be sold on weight and measure, and cannot be traded for future value or for speculation. This kept these items in circulation so that ordinary folk could go about daily life without undue hardship caused by artificial shortages.
This placed Islamic investment institutions such as banks and funds in a difficult position, putting gold-backed exchange traded funds (ETFs), bullion bars and even mining shares off limits.
The Shariah standard was introduced to change this.
Ms Dempster says a number of existing gold products have now been certified as Shariah compliant and are being marketed as such. Several new regionally issued products are also under development.
"The Dubai Gold and Commodities Exchange and Ayedh Dejem Group have already said that they intend to develop and launch a new Shariah-compliant gold spot contract," she adds.
These will provide easy access to Shariah compliant gold for retail and institutional investors, Ms Dempster says. “We expect to see a number of these new products being launched next year, which should prove a harbinger for a pickup in demand from the second half of next year."
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Gold set to surge on Sharia standard
Sharia-compliant gold standard to attract massive Islamic investments
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According to research by Goldcore, international bullion brokers who supply precious metal bullion delivery and storage in the US, the potential market for Islamic investment is vast.
If just one per cent of Islamic finance goes into gold, demand could increase up to a massive 1,000 tons a year, Goldcore says. In 2016 gold production set its third successive record ever, with around 3,222 tonnes, or 103 million ounces being produced.
This figure by the Thomson Reuters GFMS Gold Survey 2017, also predicts that production levels are set for long-term decline.
“The rise, however, was modest and in our view these record breaking habits are close to an end,” the survey said. “The growth rate (of production) has roughly halved every year for the last three years, partly as output from new mines has slowed and we expect production to contract in 2017.”
Adopting a Shariah standard has implications not just for the Muslim world but the UAE itself. Dubai in particular is rising through the ranks as a purchase and investment destination as it accounts for 20 per cent of world sales of precious metals, according to the WGC.
This has led to the emergence of institutions such as Noor Bank, Regal Assets and others that will buy and store bullion on behalf of clients from around the world.
The adoption of a Shariah standard was less of an issue for individual investors than it was for institutions that offer gold-based instruments, says Ibrahim Mohammed, chief executive of GoldGuard, a Dubai-based bullion investor.
"I don't think many ordinary Muslims were aware that there was a need for a Shariah standard," Mr Mohammed said. "They've always used gold as a hedge against the future. But what it has done is encourage institutions to set up gold investments and bring them to the marketplace. From an industry perspective it's been good."
Earlier this year GoldGuard together with OneGram, a Dubai based blockchain issued the first Sharia-compliant gold-backed cryptocurrency. Bullion is stored in a vault inside Dubai Airport Free Zone.
Mr Mohammed says interest has come not just from the Muslim world, but also Europe.
"We are surprised at the level of interest from investors from Europe, especially the UK, where people are wanting to guard against a pound devaluation. So far we have had more sales from Europe than from Asia."
What this points to is that Shariah instruments are appealing to a wide audience. And, perhaps even more significantly, it shows that Dubai is growing as a centre of trust for investors looking for safety in an uncertain world.
"Dubai is being viewed as a stable place in a world where anything can happen. It is really encouraging that investors are coming here to protect their assets."
And as awareness of Shariah-compliant gold investment grows, Dubai's share of the market is likely to grow.
"Investors are becoming aware that there are more options available to them, and that Shariah instruments are worth considering," Mr Mohammed says.
Mountain%20Boy
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
ANATOMY%20OF%20A%20FALL
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Company%20Profile
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Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Neil Thomson – THE BIO
Family: I am happily married to my wife Liz and we have two children together.
Favourite music: Rock music. I started at a young age due to my father’s influence. He played in an Indian rock band The Flintstones who were once asked by Apple Records to fly over to England to perform there.
Favourite book: I constantly find myself reading The Bible.
Favourite film: The Greatest Showman.
Favourite holiday destination: I love visiting Melbourne as I have family there and it’s a wonderful place. New York at Christmas is also magical.
Favourite food: I went to boarding school so I like any cuisine really.
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Racecard
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The biog
Name: Shamsa Hassan Safar
Nationality: Emirati
Education: Degree in emergency medical services at Higher Colleges of Technology
Favourite book: Between two hearts- Arabic novels
Favourite music: Mohammed Abdu and modern Arabic songs
Favourite way to spend time off: Family visits and spending time with friends
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
