Weil’s View on Finance, Afternoon Edition

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August 20, 2013 by apicomely

And now for your end-of-the-day links. The societal value of activist investors Wall Street Journal columnist Francesco Guerrera speaks to William Ackman, Carl Icahn and other heavyweights and comes to this thoroughly rational conclusion: “Activism investing is just another way to try to beat the market by picking undervalued stocks. The difference is that activists don’t wait for the market to recognize a company’s value, they try to make things happen on their own terms.” When is it bribery to hire top government officials’ children? Andrew Ross Sorkin has a thoughtful column on this question after reports that the Securities and Exchange Commission is investigating whether JPMorgan Chase hired the children of China’s elite to help it win business. He writes: “If JPMorgan Chase is found to have violated the Foreign Corrupt Practices Act by hiring the children of the elite, then the entire financial services industry is probably in a heap of trouble.” Just how much did Glencore overpay for Xstrata?

India central bank allows non-bank Islamic finance firm

It said it had obtained approval to operate from the RBI and would follow the Islamic ban on interest; it will not take deposits from customers. “We propose to roll out the products by the end of August,” a spokesman for Cheraman, formerly known as Al Barakah Financial Services, told Reuters. He did not elaborate on the design of the products. Instead of interest, Islamic finance uses structures such as asset buy-backs and agency agreements to provide returns to investors.

RBI allows non-bank Islamic finance firm

But some companies, especially in Kerala which has a large Muslim population and an overseas diaspora of workers who remit money back from the Gulf, are nevertheless trying to develop Islamic financial products outside the banking sector. Cheraman Financial Services, based in Kerala’s city of Kochi, plans to offer leasing and equity-finance products under Islamic principles. It said it had obtained approval to operate from the Reserve Bank of India and would follow the Islamic ban on interest; it will not take deposits from customers. “We propose to roll out the products by the end of August,” a spokesman for Cheraman, formerly known as Al Barakah Financial Services, told Reuters. He did not elaborate on the design of the products.

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