The New Muslim Consumer is a new phenomenon that the world is becoming aware of and coming to grips with as a powerful and untapped market audience. In a pioneering research done by communications group Ogilvy & Mather in collaboration with market research specialist TNS, the New Muslim Consumer is defined as young, proud of their religion and with substantial spending power.
Their profile debunks the many myths and stereotypes that surround Muslim consumer attitudes towards brands and their marketing communications. More importantly, the study highlights the risks that exist once Muslim consumers are alienated, and provides guidelines for companies on how to avoid a mistaken approach in their marketing communications.
The study serves as a platform for the launch of Ogilvy Noor, a joint venture of Ogilvy & Mather and TNS, which aims to be a multidisciplinary global Islamic branding practice that aims to help brands better engage with Muslim consumers worldwide.
A mistaken approach is often taken by Takaful marketers when wooing customers. There is a misconception that Takaful is basically insurance with surplus distribution. This image does not do justice to Takaful operators, as surplus distribution overshadows the concept of Tabarru, or risk sharing, which is at the very heart of Takaful. So we put surplus distribution under scrutiny as it applies to the Wakalah and Mudarabah models, and study it for appropriateness and viability.
The legal issues and challenges in the contract of Musharakah, and Musharakah Mutanaqisah in particular are explored in a two part series that focuses on the solicitor. It covers an introduction to the facility and the differing expectations that the banks and the customer expects of the solicitor.
Private equity and venture capital have the potential to be key growth engines for the Islamic finance industry. Shariah compliant private equity and seems plausible if the right human capital is deployed, that can combine not only advance finance skills but also solid knowledge of Shariah.
The role of venture capital in an Islamic economic system seems likely only if the government facilitates it. The critical issues include an adequate legal framework, and easy entry and exit mechanism and potential entrepreneurs. It seems ideal for Islamic finance through the participatory financing modes with the Mudarabah concept being the most common.
The Thai Securities Commission is currently in the process of issuing a new regulation by July this year that permits both domestic and international issuances of Sukuk certificates. The country’s ministry of finance has also prepared a draft regulation to exempt the originator from land transfer taxes and registration fees, which is up for cabinet approval. In the coming months, there is talk that the Bank of Thailand plans to issue a Baht denominated Sukuk with an issue size of approximately THB5 Billion (US$ 153 million). Given this situation, Allen & Overy Thailand takes us through the first few deals likely to follow.