Ahmed bin Sulayem, the chairman of Dubai Multi Commodities Centre, is targeting Islamic funding for the tower. Antonie Robertson / The National
Ahmed bin Sulayem, the chairman of Dubai Multi Commodities Centre, is targeting Islamic funding for the tower. Antonie Robertson / The National

Dubai Multi Commodities Centre a pioneering force in Sharia compliance



The recent announcement that Dubai aims to become a global centre for Islamic finance and economy has sparked a surge of interest in the emirate in all aspects of Sharia-compliant business.

But in one business in particular, the Dubai Multi Commodities Centre, the news was greeted as confirmation of a trend that has been under way for at least seven years.

Ahmed bin Sulayem, the executive chairman of the DMCC, believes his organisation, the authority that runs the Jumeirah Lakes Towers Free Zone, has pioneered the use of sophisticated Islamic financial products and is ready to play a major role in the next stage of the industry's development.

"We have a proven track record in Islamic finance, ever since we launched our $200 million [Dh734.6m] gold sukuk back in 2005. It helped fund our expansion without putting a burden on the Government, and we're well prepared to do whatever is necessary to help ensure the current ambitious project is a success," says Mr bin Sulayem.

Perhaps the traditional image of the DMCC as a market for precious metals, diamonds and other commodities has obscured its credentials as an Islamic trading centre, but Mr bin Sulayem is certainly not reluctant to parade the centre's Sharia-compliant lineage.

"The announcement on the Islamic economy in Dubai shows there has been a change of culture with regard to the Sharia industry," he says.

"Ownership of solid assets and shared risk are the essential elements of Islamic business. Where we believe we have the edge is in forward-looking Islamic products, supported by UAE-based assets that meet the most stringent criteria of Sharia compliance."

The latest venture is a project called Tradeflow, which has been given the official seal of Islamic approval by Hussain Hamed Hassan, the chairman of the fatwa and Sharia supervisory board of Dubai Islamic Bank and one of the foremost Islamic scholars in the world.

Tradeflow grew out of the DMCC's business in Dubai Commodity Receipts (DCRs) that began in 2004 as a way of trading warrants showing ownership of physical assets in DMCC's vast storage facilities. It was the first time what is effectively a warehouse receipt was traded in Dubai.

It quickly turned into a $1 billion business with transactions involving commodities such as oil, precious metals, steel, cotton and other agricultural products.

Last year, the business in DCRs was renamed Tradeflow and made Sharia-compliant to allow trade in commodity murabaha transactions.

Murabaha is one of the most common forms of Islamic instruments that enable traders to deal in interest-free transactions. Interest, or riba, is forbidden in Sharia-compliant finance.

Tradeflow is the latest in a line of Sharia-compliant products the DMCC has introduced, with the advice of Shariah Capital,a US-based consultancy.

After the 2005 gold sukuk, which was redeemed in 2010 with investors given the option of getting their return in cash or gold, Sharia-compliant products were rolled out on a regular basis, says Mr bin Sulayem.

In 2008, he again joined forces with Shariah Capital to launch Dubai Shariah Asset Management, which created Islamic hedge funds for the first time in the UAE. Two funds are still operating, one investing in gold, the other in energy and mining resources, under the management of BlackRock, the US firm that is one of the biggest asset managers in the world.

"Sharia-compliant hedge funds are a big innovation and give us a real edge," says Mr bin Sulayem. The funds won plaudits from professionals in the Islamic financial industry and have showed solid returns in a difficult global outlook for hedge funds. Last year, the gold fund became the first to market a retail investor offering.

Another innovative product was the electronic traded fund, Dubai Gold Securities, marketed on Nasdaq Dubai in 2009. "We were very proud of that. It was the first Sharia-compliant gold product backed by physical assets anywhere in the Middle East," says Mr bin Sulayem.

Islamic products have been a major focus of the DMCC's growth plan, which seems to be paying off. This week, Mr bin Sulayem announced that 2,033 new clients had registered at the DMCC free zone last year, bringing the total to 5,720, ranging from start-ups to multinationals.

"We have harnessed Dubai's logistical offering [port, airport, Metro] and its strategic position to establish Dubai as the global gateway for commodities trade and to create a business-friendly market place in the free zone," he said.

Now the job is to extend this success further into the Islamic financial industry. Mr bin Sulayem has made his case to the special committee charged with overseeing the strategy to make Dubai a leading hub of the global Islamic economy.

"They listened to our story and I think they were impressed. We're ready to support the initiative in any way to help ensure its success," he said.

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Salah in numbers

€39 million: Liverpool agreed a fee, including add-ons, in the region of 39m (nearly Dh176m) to sign Salah from Roma last year. The exchange rate at the time meant that cost the Reds £34.3m - a bargain given his performances since.

13: The 25-year-old player was not a complete stranger to the Premier League when he arrived at Liverpool this summer. However, during his previous stint at Chelsea, he made just 13 Premier League appearances, seven of which were off the bench, and scored only twice.

57: It was in the 57th minute of his Liverpool bow when Salah opened his account for the Reds in the 3-3 draw with Watford back in August. The Egyptian prodded the ball over the line from close range after latching onto Roberto Firmino's attempted lob.

7: Salah's best scoring streak of the season occurred between an FA Cup tie against West Brom on January 27 and a Premier League win over Newcastle on March 3. He scored for seven games running in all competitions and struck twice against Tottenham.

3: This season Salah became the first player in Premier League history to win the player of the month award three times during a term. He was voted as the division's best player in November, February and March.

40: Salah joined Roger Hunt and Ian Rush as the only players in Liverpool's history to have scored 40 times in a single season when he headed home against Bournemouth at Anfield earlier this month.

30: The goal against Bournemouth ensured the Egyptian achieved another milestone in becoming the first African player to score 30 times across one Premier League campaign.

8: As well as his fine form in England, Salah has also scored eight times in the tournament phase of this season's Champions League. Only Real Madrid's Cristiano Ronaldo, with 15 to his credit, has found the net more often in the group stages and knockout rounds of Europe's premier club competition.

Stan%20Lee
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THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk