pinkish
4th April 2006, 04:06
Hi all,
i want to start a new topic with u all to discuss it and find answers to it...
first of all, i guess all of us heard about the deal with Dubai ports
i wonder why foreign investors who are unfamiliar with Islamic finance consepts are keen to buy the bonds of Dubai's Ports, Customs and Free Zone Corporation?
secondly, ii have heard that the bonds will be repaid by cash and equity. Why do you think this method is being used?
some of the questions came into my mind and they may came to urs as well....
Pinkish from UAE
waiting 4 ur participation
Alpha
4th April 2006, 09:19
Eh? Confused
Its called a students homework /assignment question and not particularly well disguised :wink:
Cornish Steve
4th April 2006, 11:20
i wonder why foreign investors who are unfamiliar with Islamic finance consepts are keen to buy the bonds of Dubai's Ports, Customs and Free Zone Corporation?
Since you had the guts to post your message here, I'll take a shot at it.
A big majority of investors are simply in the business of making money. They'll invest in anything anywhere if they believe the return on investment, in light of the risk of the investment, is good. Obviously, the greater the risk, the higher the demanded return. In this light, I'm sure that mainstream investors don't give a hoot about Islamic finance concepts. All they care about is the relative safety of the investment (Dubai is a reasonably stable country) and the return.
Having said that, some people do invest only in companies with which they agree philosophically. A number of investment funds in the US, for example, invest only in 'green' companies. These companies practice policies that are good for the environment. Other investors may pull their money out of a company if they disagree with it morally. There's a clothing store in the US, for example, whose ads are very risque; many investors with a conscience won't buy their stock.
In this light, members of the Islamic faith may be more likely to invest in companies based in an Islamic nation. Those who disagree with Islamic laws of finance or the policies of the Dubai government, may be less likely to invest in them. Still other people like to invest in their own economy and not the economy of another country. These are factors, but the big institutional investors are simply looking for profit. This is capitalism at work.
As for your other question, I'll leave that for others to answer.
If this is indeed an assignment, as someone as inferred, good luck with it.