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Investment opportunities for observant Muslim clients

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Canadian Islamic Wealth, which launched in 2019, manages about $10 million of investments from 200 Canadian families.

In 2019, 3.7% of Canadians reported they were Muslim, according to Statistics Canada. Mohamad Sawwaf, founder and CEO of Toronto-based fintech and Halal financial service provider Manzil, said Canada’s Muslims probably have more than $20 billion in assets to potentially invest.

Rising interest rates have made income-oriented investments more popular, with money flowing into high-interest savings account products and GICs. But Reitberger said there are few Islamic finance choices for income-oriented Canadian retail investors.

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One option is Sukuks, which are complex, bond-like instruments that fund land development and generate rental income, Reitberger said. They may also invest in manufacturing or infrastructure such as roads and bridges.

Other options include the Manzil Mortgage Fund and the SP Funds Dow Jones Global Sukuk ETF (NYSE Arca: SPSK), Reitberger added.

Sukuk funds are usually based outside of Canada and often require an up-front investment of more than $100,000, Sawwaf said. There are publicly traded options available (from Florida-based SP Funds for example), but many Canadian clients don’t like foreign currency volatility, he said.

Through CI Direct Investing, retail clients can invest in Manzil Halal Portfolios. The portfolio allocates some money to the Manzil Mortgage Fund, an operating-memorandum fund launched as a private placement that earns income from Manzil-provided residential mortgages. The remainder is allocated to the passive U.S. equity-based Wahed FTSE USA Shariah ETF (Nasdaq: HLAL). The higher the client’s risk tolerance, the higher the percentage allocated to HLAL, which excludes certain industries such as alcohol, pork production and casinos.

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The Manzil Mortgage Fund is a “fixed-income equivalent style fund,” Sawwaf said. Investors must give two months’ notice if they want to withdraw funds from the mortgage component of Manzil Halal Portfolios, according to CI Financial. It could take up to six months to receive withdrawals, and clients wanting to withdraw more than $20,000 might have to wait a year.

More than 12,000 families are on the wait list to finance their home through Manzil, Sawwaf said. The firm does not charge interest but gives home buyers a choice of a partnership agreement (Manzil shares ownership of the property and sells its share to the client) or an arrangement in which Manzil buys the home and re-sells it to the client at a profit, payable in instalments.

The Manzil Mortgage Fund provides funding to and earns income from those residential mortgages. Manzil self-finances the mortgages from capital raised through the Manzil Mortgage Fund. “You’re investing in sharia-compliant mortgages, so every time someone makes a payment on their mortgage, that is going back to the investors,” Reitberger said.

Sawwaf said Manzil is developing other solutions for income-oriented investors. The firm is working on an equity-based income fund (which he said could launch by November) focused on dividend-paying value stocks. It’s also looking at creating a Halal real estate investment trust and a commercial mortgage fund.

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Porsche retail network continues its investment in Canada

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Five of the brand’s retail operations inaugurated new buildings this year while an entirely new sales point will be added in the Niagara area

Toronto, ON, Dec. 08, 2022 (GLOBE NEWSWIRE) — Porsche Cars Canada, Ltd. (PCL) is pleased to recognize the substantial investments by its dealer partners coast to coast in 2022 with the inauguration of five new retail point facilities as well as the ground breaking of an entirely new location in St. Catharines, ON.

“As we look back to 2022, one of the proudest accomplishments will certainly be the enhancement of several of our brand’s retail locations across the country,” said John Cappella, President and CEO, Porsche Cars Canada, Ltd. “The investments by our dealer partners reflect the confidence in our brand and its enduring success in Canada.”

Three existing dealerships opened the doors to new facilities this year: Porsche Centre Edmonton and Porsche Centre Winnipeg, both operated by Go Auto, as well as the Wyant Group’s Porsche Centre Saskatchewan. Moreover, two other new buildings featuring the latest Destination Porsche design architecture were inaugurated. Bookending the country, Dilawri and Open Road Auto partnership Porsche Centre Richmond as well as Steele Group’s Porsche of Halifax now espouse the striking new corporate concept. The new design was first adopted in Canada with the opening of the relocated Porsche Centre Quebec, owned by Drew Tilson, followed by the all-new Lithia-Motors-operated Porsche Centre Markham last year.

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The Destination Porsche concept is characterized by its emphasis on brand experience and inspiration, its flexibility, and the use of digital media for individualized communication. A central idea is that dealerships are intended to become a central gathering place for the Porsche community, appealing to current as well as new customers. Destination Porsche as well as all other Porsche Centres are also ready for the accelerated electrification of the brand’s line-up, with dedicated electric vehicle (EV) charging stations on-site, as well as an EV battery repair room for servicing the Porsche Taycan and the brand’s future electric models.

In addition to the enhancements at existing retail locations, earth works have officially commenced at the future site of Porsche Centre Niagara, an entirely new dealership located in St. Catharines. The Policaro Group will be operating this point along with Porsche Centre Oakville. Furthermore, the group is slated to inaugurate Porsche Centre Kitchener-Waterloo in 2023. The coming year will also see the opening of Mark Motors’ relocated facility in Ottawa. These investments by PCL’s dealer partners will benefit customers and give new momentum to the evolution of Porsche automotive retail in Canada.

About Porsche Cars Canada, Ltd.

Established in 2008, Porsche Cars Canada, Ltd. (PCL) is the exclusive importer and distributor of the Porsche 911, 718 Boxster and 718 Cayman, Taycan, Panamera, Cayenne, as well as Macan. Headquartered in Toronto, Ontario, since 2017, PCL employs a team of more than 60 in sales, aftersales, finance, marketing, retail development, and public relations. They, in turn, work to provide Porsche customers with a best-in-class experience in keeping with the brand’s 70-year history of leadership in the advancement of vehicle performance, safety, and efficiency. In 2019, a Parts Distribution Centre opened its doors in Mississauga to service the countrywide network of 21 Porsche Centres. PCL is the dedicated subsidiary of Porsche AG, headquartered in Stuttgart, Germany. In 2021, Porsche delivered 9,141 units in Canada, marking its best-ever sales year.

At the core of this success is Porsche’s proud racing heritage that boasts some 30,000-plus motorsport wins to date.

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Exclusive: Canada’s biggest pension plan, CPPI, ends crypto investment pursuit

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TORONTO, Dec 7 (Reuters) – Canada’s biggest pension fund, CPP Investments, has ended its effort to study investment opportunities in the volatile crypto market, two people familiar with the matter told Reuters.

The reasons behind CPPI’s abandonment of crypto research were not immediately clear. CPPI declined to comment but said it has made no direct investments in crypto. It referred to previous comments on cryptocurrency by its CEO, John Graham, in which he sounded a note of caution.

CPPI’s Alpha Generation Lab, which examines emerging investment trends, had formed a three-member team in early 2021 to research crypto currencies and blockchain-related businesses, with a view to taking potential exposure, the people added.

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But CPPI abandoned the pursuit this year and redeployed the team to other areas, the sources said.

CPPI’s move also comes as two of Canada’s largest pension funds have written off their investments after the collapse of crypto exchange FTX and crypto lender Celsius this year.

Earlier this year CPPI CEO Graham said that the pension plan, which manages C$529 billion ($388 billion) for nearly 20 million Canadians, did not want to invest in crypto merely because of the fear of missing out.

“You want to really think about what the underlying intrinsic value is of some of these assets and build your portfolio accordingly,” Graham said in a June speech. “So I’d say crypto is something we continue to look at and try to understand, but we just haven’t really invested in it.”

It was unclear when CPPI dropped its plan. One of the sources said the team was actively assessing investment opportunities as late as July this year, but the second source said the team ended its work earlier than that.

The details of CPPI’s pursuit of cryptocurrency investment and its decision to end it have not been previously reported.

The sources declined to be identified because the information was not public.

Canadian pension funds’ exposure to crypto sector has come under scrutiny following the FTX debacle. While Canadian pension funds are not prohibited from buying cryptocurrencies, they are known for their risk-averse investing strategies to generate steady returns for pensioners.

While CPPI has avoided crypto investments, some of its peers have been caught up in the sector’s mayhem this year. The Ontario Teachers Pension Fund (OTPP), which oversees about C$242 billion in assets, has written off its investments worth C$95 million in FTX. OTPP said it was “disappointed” with its investment in FTX.

Earlier this year, Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), said it was writing off its investment of C$150 million in bankrupt crypto lending firm Celsius. CDPQ has initiated legal proceedings against Celsius in bankruptcy court.

The Ontario Municipal Employees Retirement System (OMERS), which manages C$121 billion, made three allocations to crypto-linked businesses through its OMERS Ventures business between 2012 and 2018 but exited all investments in 2020.

Another Canadian pension fund, OP Trust, told Reuters that it has investments in the digital asset fund space that is managed externally. The investment is in the underlying crypto technology, it said.

($1 = 1.3650 Canadian dollars)

Reporting by Divya Rajagopal in Toronto
Additional reporting by Maiya Keidan
Editing by Denny Thomas and Matthew Lewis

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Foreign investors to face additional scrutiny under proposed changes to investment act

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The federal government on Wednesday unveiled what officials bill as the biggest update to Canada’s foreign direct investment laws in over a decade, with new rules requiring approval for investments in “sensitive sectors” and broader efforts to share information on firms under review.

The pre-implementation requirement is one of several changes outlined in a bill seeking to modernize the Investment Canada Act in order to further protect Canada from malicious foreign actors.

“The reality is, geopolitics of the world today have vastly changed in the last few years,” Minister of Innovation, Science and Industry Francois-Philippe Champagne told reporters Wednesday evening in Ottawa.

“That’s why we must be prepared to face the challenges that could endanger our economic security, and I would say our national security.”

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The proposed amendments do not specify what sectors will require the new pre-implementation filing, which will require firms seeking to make foreign investments in those sensitive sectors to give advance notice of those proposed investments. The change is meant to give the government a chance to ensure foreign investors do not gain access to “sensitive assets, information, intellectual property or trade secrets” that would become available on the closing of a deal before a national security review can be done.

Champagne told reporters the list of sectors the changes seek to protect will include critical minerals — where lithium, graphite and cobalt are increasingly being used for electric vehicles and other goods — as well as sensitive technologies and those holding Canadians’ personal information.

“We’ve seen more and more in the digital economy, people want (to) access the data of Canadians,” Champagne said.

He also mentioned quantum and artificial intelligence as technologies in need of protection.

Failure to submit the filing will result in a fine of at least $500,000, according to the legislation.

Other changes in the proposed bill include a more streamlined process to initiate a national security review of any foreign investment and additional powers to the industry minister during such a review.

The legislation would also increase penalties for any non-compliance with the act to $25,000 per day, per infraction, with no limit.

 

Why reform the foreign investment law now?

The government says the proposed changes are meant to address “evolving national security concerns,” and are the latest move by Ottawa amid renewed scrutiny on its ability to counter foreign interference and influence in its domestic affairs.

The federal government last month unveiled a new Indo-Pacific strategy aimed at countering a “disruptive” China that includes military, domestic security and cybersecurity enhancements, and a new Investment Canada Act rule restricting the involvement of foreign state-owned firms in Canada’s critical mineral sectors was announced on Oct. 28.

The new legislation would give Champagne, as industry minister, the ability to extend a national security review into any foreign investment after consulting with the public safety minister. Currently, extensions require a Governor in Council order. The government says the change would streamline the process and give security and intelligence agencies more time to complete their reviews.

Champagne would also be able to impose conditions on an investment under national security review, including freezing the transfer of assets and intellectual property, and directly approve actions by investors that would mitigate a national security risk. The minister said this change brings Canada in line with the United States, which already has such rules in place.

He added that while the current version of the Investment Canada Act only allows the government to say “yes” or “no” to foreign investments being reviewed for national security concerns, the change would give Champagne the opportunity to say “maybe, but with conditions.”

The proposed changes would also allow Canada to share information about investors with foreign allies “to potentially address common national security threats.”

Government officials said in a technical briefing this is aimed at better examining investment proposals from firms that may be seeking sensitive technologies in multiple jurisdictions.

Currently, specific investor information is considered privileged and cannot be disclosed.

Champagne’s mandate letter instructed him to modernize the Investment Canada Act with goals to “promote economic security and combat foreign interference” by strengthening the national security review process.

The Indo-Pacific Strategy also stated that Canada will implement changes to the Investment Canada Act in an effort to “strengthen the defence of Canadian infrastructure, democracy and Canadian citizens against foreign interference” at the domestic level — protecting Canadian critical minerals supply chains, intellectual property and research and strengthening Canada’s cybersecurity systems.

Following the announcement, Champagne ordered three Chinese firms to divest from Canadian critical mineral companies on Nov. 2.

— with files from Global’s Heidi Lee and The Canadian Press

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