Buffett's Berkshire says quarterly profit rises 15 pct
Feb 25 Warren Buffett's Berkshire Hathaway Inc on Saturday said fourth-quarter profit rose 15 percent from a year earlier, helped by gains from investments and derivatives.
By Bernardo Vizcaino Islamic finance, based on religious principles which avoid interest and pure monetary speculation, is growing rapidly, supported by large pools of sharia-compliant funds in the Gulf and the opening of North African markets in the wake of the Arab Spring. Here is summary of commonly used terms and concepts: > Amana: Deposit in trust; a widely applied term that refers to anything in the safekeeping of another. > Arboun: Down payment; an advance payment which is counted as part of the purchase price if the buyer decides to complete the transaction, but which becomes the property of the seller if the deal is not completed. Can be used as a form of short-selling. > Bay: Sale; an agreement between two parties in which ownership of an item is transferred from seller to buyer for a price. > Fatwa: Religious opinion under Islamic law - a formal response issued by an expert scholar. > Fiqh: Islamic jurisprudence; it provides supplemental legal reasoning in cases where explicit rules are not available in sharia law. > Gharar: Contractual ambiguity due to ignorance of an aspect of the goods, in which one or both parties stand to be deceived. Gharar should be avoided but there are different levels of it and only some of them are banned outright. The concept is cited to ban pure monetary speculation. > Hadith: Report of the sayings or actions of the Prophet Mohammed. > Halal: Lawful, a deed permitted by Allah. > Haram: Unlawful, impermissible. > Hukum: Ruling. There are five categories: obligatory (wajib/fard), recommended (mustahabb), neutral/permissible (mubah), reprehensible (makruh), or forbidden (haram). > Ijara: Lease or rental arrangement; for example, one party leases equipment, buildings or other facilities to a client for an agreed rent. In a common form of ijara sukuk, the originator sells assets to a special-purpose vehicle which in turn issues sukuk certificates to obtain funding to pay for the asset. > Ijtihad: Decision-making in Islamic law by personal effort, independently of any school of jurisprudence. To be valid it has to be rooted in the Koran and the hadith, and there must be no established doctrine ruling the case. > Istijrar: Continuous purchase or supply contract; the supplier undertakes to provide a particular product on an ongoing basis at an agreed price with payment made in an agreed manner. > Istisna: Manufacturing contract; a type of sale, similar to salam, in which a price is paid for goods that are subsequently manufactured and delivered on a stipulated date. > Kafala: Guarantee; a standard Islamic transaction in which a guarantor (kafil) agrees to assume responsibility for the debts of a creditor (makful 'anhu). > Khiyar: Option; power to cancel a contract. Jurists recognise different types including khiyar al ru'yah (option to cancel upon viewing), khiyaral'ayb (option to cancel if undesirable), khiyar al naqad (option to cancel on non-payment), khiyar al shart (option to rescind sale), and khiyar al majlis (option to cancel during the life of the contract). > Maqasid al Sharia: The higher purposes of sharia law, which is believed to be built on three objectives: purification of the soul, upholding justice and protecting interests of all sides. > Maslaha'ammah: The public good or benefit. > Maysar: Gambling, which is impermissible. > Mudaraba: Investment management partnership; one party provides funds while the other provides expertise and management. Any profits are shared between the two parties on a pre-agreed basis, while losses are borne by the provider of the capital. Mudaraba is a common structure for sukuk. > Mudarib: Investment manager. > Murabaha: Cost-plus sale; a financial institution agrees to purchase merchandise for a client and the client promises to buy it from the institution at an agreed mark-up. In a common form of murabaha sukuk, a special-purpose vehicle is set up to raise funds from sukuk holders and purchase an asset which the SPV will in turn sell to the originator at a mark-up. The originator takes delivery of the asset and makes periodic payments to the SPV which flow to sukuk investors. > Musawama: Negotiated sale, in which the price of a commodity is negotiated without overt reference to the price previously paid by the seller. > Musharaka: Investment partnership. In a typical musharaka agreement, two or more parties agree to provide capital towards the financing of a commercial venture, share profits according to a stipulated ratio, and share losses on the basis of equity participation. A typical structure for sukuk. > Qard: Loan; X lends Y some wealth to be repaid after a specified amount of time, but which can be reclaimed at any time. It is legitimate for a borrower to repay more than the amount borrowed as long as that is not stated as an obligation in the contract; some Islamic banks cope with this constraint by charging servicing fees on loans. A "qard hasan" is a loan in which no additional amount is repaid. > Rabb al mal: Owner of capital, investor. > Riba: Interest; any increase in a loan or sale that accrues to the lender, seller or buyer without the provision of an equivalent countervalue to the other party. Riba is impermissible; the term encompasses various types of illicit gain, of which banking interest is one example. > Salam: Deferred delivery sale, the sale of fungible goods to be delivered in the future for a price to be paid in the present. It resembles a forward contract in conventional finance. > Sharia: Islamic law originating in the Koran, as defined in practices and explanations by the Prophet Mohammed. > Sukuk: Islamic certificate; a term used to describe equivalents to conventional debt issues such as bonds. In contrast to debt issues, sukuk holders are the legal and/or beneficial owners of the underlying assets, sometimes through a special-purpose vehicle. As such they receive the equivalent of a coupon from the performance of the yielding asset. > Sunna: The actions, deeds, endorsements and characteristics of the Prophet Mohammed. > Takaful: Islamic insurance, an alternative to conventional commercial insurance based on the concept of mutual support. It provides mutual protection of assets and property; the takaful company oversees a pool of funds contributed by all policy holders, but does not necessarily bear risk itself. > Tawarruq/tassiyeel: Monetisation, to convert something to cash. One party purchases an asset on credit from a second party on a deferred payment basis, and then sells it on to a third party, receiving instant cash. Used by some Islamic banks to provide cash financing to customers (also known as "commodity murabaha"). In "organised" tawarruq, the first party does not take material ownership of the asset; this is controversial among some scholars. > Wa'd: Unilateral promise; the primary difference between this and a contract is that the promise is binding only on the maker, whereas a contract binds both parties. > Wakala: Agency; a standard Islamic practice where one party acts as an agent (wakil) for another party. In a wakala sukuk, certificates are issued by an originator through a special-purpose vehicle that purchases specific assets, which in turn are given to a wakil for management (in many cases the originator is also the wakil). The originator undertakes to buy the assets at maturity at an agreed price. > Waqf: Charitable trust, an endowment set up for Islamic purposes (usually for education, mosque building or the poor). It involves tying up a property in perpetuity so that it cannot be sold, inherited or donated to anyone. > Zakat: Zakah tax, the third pillar of Islam; obligatory alms giving. Every Muslim who has wealth above a prescribed amount is required to give money to the Islamic authority for distribution to the poor and the needy. (Compiled by Bernardo Vizcaino; Edited by Andrew Torchia)
NEW YORK, Feb 25 Berkshire Hathaway Inc Chairman Warren Buffett on Saturday offered his latest critique of fund managers, saying that "both large and small investors should stick with low-cost index funds."
* Has received takeover proposals from three bidders (Adds context on M&A process, details)