A website claiming to be the first to allow Muslims to trade shares and buy investment products online in accordance with Islamic principles launches today with one eye on a $500m market flotation.

IslamiQ.com will offer banking, finance and insurance products and services that are in compliance with Shari'ah laws. Chief executive Hasnita Dato Hashim, pictured left with venture co-founder Peter Farrid Faisal, said it would be targeted at an Islamic capital market worth $150bn, as well as the 94m Muslims who are forecast to be online by 2002.

Shari'ah laws decree that money must be productive in society and forbids investments in activities such as gaming and alcohol or conventional financial institutions. Commercial considerations must be combined with social obligations.

IslamiQ.com has raised $6m from two Middle East institutions, the International Investor of Kuwait and Jeddah-based Dallah Al Baraka Group. Dr Hashim said a second round of fundraising to attract $50m of new finance is under way and an IPO on either the Nasdaq or London stock exchanges is planned for within the next year.

"Muslims worldwide can now invest on a level playing field in terms of the technology and information available whilst still keeping to their Islamic principles," she said.

Three prominent Shari'ah scholars will sit on an IslamiQ.com advisory board to give guidance on and approval to investment decisions. Dr Hashim has eight years' experience in Islamic investment banking.

• Most online retailers fail to satisfy consumers and are providing a poor service, according to retail research consultancy Verdict.

A report published today says significant investment in delivery functions will be required if many e-tailers are to go into profit.