In booming economy, an attempt to make stocks halal
Gujarati businessman, who bounced back after the riots, to hold meet on Shariat-friendly investments; ropes in Islamic scholars, Munich Stock Exchange chief
Mumbai, March 8: No government will ever do anything for the Muslims,” says this bearded, soft spoken investment consultant, stock broker and MD of a Rs 100-crore company. “What has to be done, Muslims have to do themselves. And there are plenty of opportunities available.”
It’s easy to write off Zafar Sareshwala (43) as a member of the Muslim elite, born into money to a Gujarati Muslim family that’s been manufacturing industrial valves for 150 years and one who can afford to say his community brothers must “get out of the Sachar-centric mindset”. But soon after Gujarat burned for months in 2002, Sareshwala’s Ahmedabad-based business was wrecked. He was nearly bankrupt.
In the story of how he bounced back is the central theme of a conference to be hosted in Mumbai-the city’s first-ever ‘Islamic Investment Opportunities Conference’, an attempt to draw Indian Muslims-nearly 15 per cent of India’s population-into the equity market boom. Sareshwala’s Parsoli Corporation Ltd will organise the conference at the Nehru Centre on March 10, even as a large group of minorities stages a dharna at Azad Maidan demanding that the Rajinder Sachar committee report be implemented.
Speaking at the conference, which has already received about 950 registrations, will be Shariat scholars including one from a Moradabad madrassa who will review a list of ‘Shariat-compliant’ stocks and discuss ‘Shariat-compliant opportunities’ in stock markets. Also participating is Uto Baader, president of the Munich Stock Exchange, who will make a presentation on how Indian stocks are today the place to park global dollars, and dinars too.
All of them also participated in a similar seminar held in Parsoli’s native Ahmedabad in December, but the scale and outreach of the Mumbai conference makes it hugely significant, organisers say.
“The stock exchange of any country is a barometer of its health,” says Sareshwala, who received many brickbats when he chose to meet Narendra Modi during the chief minister’s London trip. “And, if you’re speaking of growth, how can a country grow if 15 per cent of its population is outside that growth?”
For Muslim investors who wish to conform to the Shariat in matters of personal finance, asset-creation must be a halaal-exercise-no association with alcohol, no unethical means, no pork, no flippant entertainment businesses. While a few so-called Islamic banks and chit funds failed, the equity market will succeed, say the conference organizers.
“The filters are not so restrictive,” says Anand Tandon, investment manager and founder of Griffon Investment Advisors, who has been reading up ever since his association with Sareshwala began some years back. “About 50 per cent of the BSE 500 are available to Muslim investors,” he says.
While he will speak at the conference on how the equity markets work, how the market is booming, Tandon says the broad theme of the conference is also to get ulemas to talk to the community on the research, tell them that their country is on the growth path and they can’t deprive themselves.
For that, partnering Parsoli is the Markazul Ma’arif, an Assam-based non-governmental agency with a Mumbai arm that imparts English language higher education to ulemas, mostly the toppers from country-wide madrassas. For Maulana Burhanuddin Qasmi of the Markazul Ma’arif-literally, it means Centre of Excellence—it all began with a research paper completed by one of his wards last year. “It was on the modern economy in the light of the Quran,” says the Maulana. “We found that there are possibilities in the existing stock market where Muslims can invest, but simply don’t have the information required.”
The three-year-old Parsoli Islamic Equity (PIE) Research Cell’s index of Shariat-approved stocks tries to fill that hole. This index, apart from discarding companies engaged in activities or means considered non-Muslim, also gives details on debt-equity ratios, the rule of thumb being that debt be no more than 33 per cent of total market capitalization.
And, since the Maulana Qasmi is a “practising Muslim who intends to remain one”, like most of the 950-odd people who will attend, the organizers are showing great regard for Muslim sentiment-a separate enclosure for women, even arrangements for Zohar namaz.
“One Hindu woman asked me why a separate enclosure,” says Sareshwala. “I told her we want women to see the world of opportunities independently, away from their husband’s viewpoint.”
He stresses that his company is are completely within the regulatory environment, registered with the SEBI, listed with the BSE, very close to getting a commodities listing. That the conference is an investment, a huge business opportunity for his firm is no secret. Still, between recruitments for four or five new branches in Mumbai, he says: “We have everything that a Motilal Oswal or a Merrill Lynch can offer you, plus Shariat-compliant investments.’’