By Imtiaz Merchant
• Bonanza Portfolio ltd. and Pragmatic Wealth Management. Pvt.
Ltd has together initiated India’s premier PMS fund on the line
of Shariah compliant parameters. The fund is called ‘BonanzaPragmatic Shariah fund.’
• Bonanza Portfolio Ltd. a “Financial Powerhouse” is India’s 4th
largest broking house with presences in more than 1632 outlets
across 535 cities.
• Pragmatic Wealth Management Pvt. Ltd is one of the pioneers
in Shariah Financial Services equipped with strong capital
market knowledge and technical expertise.
• It’s the endeavor of these two business entities to see that the
PMS delivers superior performance.
BONANZA PORTFOLIO LTD
• India’s 4th largest brokerage house.
• Experienced Management and
Vibrant Staff.
• Efficient Back Office.
• NSE, BSE & PMS License.
• Bonanza Times
Pragmatic Wealth Management
• Shariah Expertise for Islamic
Investments
• Governance by Dr. M.Y Khan and Mr.
Imtiaz Merchant
• Islami Tijara Shariah Index & Shariah
Compliant Search Engine
•Market Research Team
• Islami Tijara Magazine
Needs
Indian Equity Market offers
incredible avenue for Shariah
complaint investments. At
present, it offers the best
alternative to the high net worth
Indian Muslims who would like
to invest their savings in Shariah
manner rather than deploying
their savings in Banks or Bonds.
Islamic Investment is in a
nascent stage in India, but given
the number of Muslim population
and with rising incomes there is
a good scope for BPS Fund.
Objectives
The objective is to secure long
term gains from the investments
in the combination of large and
mid size companies which are
Shariah complaint.
To help create wealth for the
Muslims in a Halal manner.
•
It has been observed that the Indian equity market offers incredible
avenue for Shariah Compliant Investments. At present, it offers one of
the best alternative, to the high net worth Indian Muslim Investors
(Rabbul - Mal) who would like to invest their savings in Shariah
manner rather than depositing their savings in the bank.
•
The Indian equity market, with its enormous potential for growth, can
compete favorably with global portfolio managers and attract high net
worth individual investors. In view of this, we decided to launch a
Shariah Fund as “Bonanza-Pragmatic Shariah Fund” (BPS – Fund) as
a joint initiative of Bonanza Portfolio Ltd (BPL) and Pragmatic Wealth
Management Pvt Ltd.
•
This Shariah PMS is approved by Securities Exchange Board of
India(SEBI) and it is approved by Shariah Board as well.
• Islamic Finance is one of the fastest growing sector of the World. This
alternative way of finance has come a long way offering little by little
more and more sophisticated products to investors.
• Important financial centers like London and Paris are challenging each
other to become the Western hub for Islamic Finance. The potential of
Middle Eastern capital available for investment, in both private and
public sectors, is approximately $4 trillion.
• Rising oil revenues and by the increasing foreign exchanges reserves
of some Asian countries will lead to increase these investment
capabilities to $6 trillion in 2012 and $10 to $ 15 trillion in 2015. This
impressive investment capabilities will skyrocket the Islamic Finance
solutions portfolio in order to allow these investment to happen (in the
Western Countries)
 Muslim Community in India and Abroad.
 High Net Worth Individuals(HNIs).
 Professionals.
 Muslim Financial Institutions
 Muslim Credit Co-operative Societies
 Politicians & Businessmen
 Investors from all Faith and Religions
1
A viable option for huge HNI Muslims of India
to invest in a Shariah Complaint manner rather
than interest based banking.
2
The BPS Fund can also be targeted to non –
Muslims because it is socially responsible and
ethically sound investment.
3
Islamic Investment is growing at the rate 15%
globally and in India it is expected to grow at
20% per annum.
4
It was observed that during economic
slowdown the Shariah complaint stocks did
better, because its of strict screening norms.
CONTD …..
5
It employs an analytical process to choose Shariah
Complaint stocks.
6
Investment policy is strictly on the guidelines and
parameters of Shariah principles. Like no days
trading , derivative trading or investments in any
kind of Debt instruments.
7
Stock selection is done from the universe of 211
Shariah complaint stocks index developed by PWM.
8
The PMS Fund is benchmark against BSE Sensex,
NSE Nifty, S&P Shariah 500 and S&P Shariah Indices.
• Islamic Investment & Finance Board (IIFB) of
India, is an Independent and non- profit
organization. The board will certify the BPS-Fund.
• The Shariah Board comprises of eminent Muftis
and Shariah Scholars.
• IIFB is lead by Maulana Mohammad Wali
Rahmani, followed by Maulana Khalid Saifullah
Rahmani, Mufti Shoibullah Khan, Mufti Hilal
Usmani and others.
MEDIA
BELOW
THE LINE
ACTIVITY
PUBLIC
RELATION
•Advertisements in well known newspapers ( Inquilab, Milli
Gazzate, etc.) read by Muslims.
•Banners on different websites visited by Muslims.
•Contributing write ups and articles to both, offline and Online
media.
•Reaching to target prospects by Seminars, Conference, Road
Shows and Product Launch.
• Pamphlet distributions and other activities.
Using various public relation tools to inform the market about the
BPS-Fund.
Fund Procedure
Screening
Process
Fundamental
& Technical
Research
Stock
Selection
Selling of
Stock.
1) Restriction Based on the Type of Securities: Investment is done in Shariah compliant stocks.
Securities trading in derivatives and intraday trading in stocks are strictly not permitted. Short
selling is completely prohibited. Stocks will be sold upon having its complete possession.
2) Restriction on Business Activity: Investment shall not be done in stocks of the companies whose
business activity is prohibited like the Conventional interest based banks, NBFC, Insurance
companies, securities trading companies, Entertainment includes film production companies,
cinema, Cable TV, music etc. Alcoholic beverages like wine and liquor, tobacco and its related
products, Pork and non- Halal food products companies.
3)
Restriction Based on Financial ratios:
a)Interest bearing debt of the companies should not exceed 33 percent of its twelve months
average market capitalization.
b)Cash plus interest bearing securities of the companies should not exceed 33 percent of its
twelve months average market capitalization.
c)Trade receivable and other debtors of the companies should not exceed 33 percent of its
twelve months average market capitalization.
d) Interest Income plus any impure income of the companies to its company's total income
should not exceed 5 percent.
CONTD …..
• On screening the BSE listed stocks it is observed that as on 31th
December 2012, out of 3500 stocks on BSE, 700 companies are Shariah
compliant. These 700 stocks together accounts for 48% of the Market
Capitalization of BSE.
• Out of these 700 stocks PWM has selected 211 top Shariah Compliant
stocks which amounts to 96% of the Shariah compliant universe for
investments.
• There are about 50 large cap, 70 mid cap and over 100 small cap stocks
available and they are sufficiently liquid for investments.
The stocks invested in PMS Fund is
selected from Shariah
compliant universe comprising Large, Mid and small size
companies. The market capitalization of these Shariah complaint
companies is well over 50 % of market capitalization of the NSE and
BSE. The fund will be investing in stocks with minimum market
capitalization of 1000 crores.
BPS – Fund will be invested in the following 9 permissible sectors :
Automobiles, Consumer Goods & Services, Construction & Reality,
Capital Goods & Industrials, Healthcare, Information Technology,
Metal & Mines, Oil & Gas, Power & Utility.
BPS Performance
BPS Performance
Bonanza Pragmatic Shariah Fund
Top 5 Holdings
Company Name
Reliance Inds.
Dr. Reddy’s
Havell’s
%
Holding
9%
8.5%
6%
Sector
Oil &Gas
Healthcare
Industrial
Sun Pharma.
5.5%
Healthcare
Eicher Motors
5%
Automobile
For equity research following ratios are taken into consideration such as Book
Value to Price, Price To Earning, Market Share to Enterprise Value, Forward Earnings,
Cash Flow, Order Flow & Market Share to Market Cap
Technical Analysis : Various indicators are used for exit & entry of the stocks like the
Moving Averages, Parabolic SAR, RSI, Standard Deviation.
Fundamental and Technical Analysis are used in conjunction and together we call it
“Rational Analysis”
•Report of the BPS – Fund will be disclosed to the clients on
MONTHLY basis.
• Net Asset Value (NAV) will be shared with the clients on weekly
basis.
• Auditors certified Capital gains Tax statement at the end of the year
is given to every client.
• Any Shariah related queries is instantly attended.
Minimum Investment - Rs.25 Lac (2.5 Million INR)
No Entry Fee (Load)
Performance Fee -
Annualized Profit up to
20%
10 % of profit
Annualized Profit above
20 %
15% on the incremental profit above 20%
(Profit distribution will be done on Half yearly basis)
Pre-Closure Fee -
0.50% (Exit before six months)
•Mr. Imtiaz Merchant is the Fund Advisor for BPS-Fund. He has
significant expertise in Fundamental as well as Technical analysis, he
has more than 14 years of experience in Equity market.
•He is well versed with Islamic Finance market and the Shariah
complaint norms for investments. He has put in extensive effort into
understanding the principles of Islamic finance and has been in
discussion with the Islamic Finance scholars and Financial experts.
•He has successfully created 14 Islamic Indexes namely Islami Tijara
Equity index (ITE index) backtracked since June 2006.
•He is also the publisher and editor of Islami Tijara Magazine on Islamic
Finance and Investments.
•
BONANZA PORTFOLIO LTD.
Bonanza House, Plot No. M-2, Cama Industrial Estate,
Walbhatt Road, Behind The Hub, Goregoan (East), Mumbai -400063.
Tel No: +91 - 22 - 6760500 / 30863700
Toll Free: 1800220252, 022-39704040
www.bonanzaonline.com Email: shariahpms@bonanzaonline.com
•
PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
102, First Floor, Topaz Society, Dr. Nair Road, Agdipada,
Mumbai Central (E), Mumbai 400011.
Tel.: +91-22-23001290 / 23007290
www.islamitijara.com Email: contact@islamitijara.com ,