Asiya upbeat on Islamic Trade Finance Fund



DUBAI: ARAB NEWS

Published — Tuesday 7 May 2013

Last update 7 May 2013 3:29 am

| نسخة PDF Print News | A A

Asiya Investments (Asiya), described as the Asia specialist investment firm, has announced the launch of its Asia Islamic Trade Finance Fund, which will invest in select, Shariah-compliant financing of short-term physical trade flows in Asia and the Middle East.
The fund aims to capture a set of opportunities that exist in today’s market.
Key among these is the expansion of both intra-Asia as well as cross-border trade flows between Asia and the Middle East. Annual intra-Asia trade is expected to quadruple from almost $ 5 trillion to $ 20 trillion by 2020. Similarly, trade between the GCC and Emerging Asia is growing at a rate of 25 percent per year.
At the same time, a shortage of dollar funding has emerged, particularly for medium-sized companies in Asia. The European banking sector, traditionally the largest provider of commodity trade finance, continues to deleverage in light of Europe’s slowdown and adjust to changes in bank capital adequacy rules under Basel III.
The Asia Islamic Trade Finance Fund seeks to fill this financing gap and in turn generate a steady stream of income based on Shariah principles. Its target return is double the rate of zakat, equating to 5 percent, while providing investors the flexibility of quarterly liquidity.
The fund has been approved by a board of leading Gulf and international Shariah scholars who will continue to supervise the fund for ongoing Shariah compliance.
The fund targets annual returns of 5 percent, and offers investors quarterly liquidity at an attractive spread to Islamic money market ‘murabaha’ funds, which pay between 0.5 percent and 1.5 percent.
It also provides a stable alternative to multi-year sukuk, which currently yield an average 3 percent.
Asiya Investments will manage the open-ended fund through the firm’s recently launched Hong Kong investment management arm.
It will do so in partnership with EuroFin Asia Group, the investment adviser to the fund and a leading Singapore-based trade finance operator.
Together the partners have seeded the fund with $ 20 million.
Ahmad Al-Hamad, group MD of Asiya Investments, said: “The timing could not be better to introduce the Asia Islamic Trade Finance Fund. It comes at a time of continued growth within the Asian continent, as well as growing cross border trade between the GCC and emerging Asia. We are ideally positioned to participate in this growth.”
He added: “Our Hong Kong investment management team and EuroFin Asia have worked together, using their expertise and understanding of both the Asian markets and Shariah structuring, to develop a best-in-class offering to our investors.”
Mohab Mufti, CEO of Asiya Investments Dubai, explained why he expects the fund to be met with considerable interest across the Gulf.
“GCC investors are eager to step up their exposure to the growing Asian economies as many of them are currently under-allocated to the region. While they are intrigued by the opportunities, most are looking for ways to expand their exposure to Asia via lower risk strategies. Currently there is a shortage of opportunities, which offer both attractive income streams and lower risk profiles, especially for those investors who require their investments to be Shariah-based.” He also pointed out that many investors wish to invest “without having to lock up their capital for several years or concentrate their risks in the narrow sukuk market.”

Sulaiman Alireza, executive director of Asiya Investments Hong Kong, described how a solution to these investors’ needs was developed.
“The fund acts as an intermediary by lending, on a fully secured basis, to producers and traders with operations focused upon raw materials, commodities and semi-finished goods. In doing so, we have created a mechanism that not only allows our investors to participate in Asia’s growth, but also meets the specific requirements of Shariah. The Asia Islamic Trade Finance Fund addresses both a real business-related funding need and the objectives of Gulf-based investors who seek investments with attractive yields and lower volatilities and correlations than other assets, including equities and sukuk.”
Asiya Investments was established in 2005 as the GCC’s first Asia specialist investment company.
Since then, the firm has deployed more than $ 500 million in the developing Asian economies across a range of assets, including public and private equity, real estate and income producing strategies.
The firm concentrates on offering clients both investment opportunities and advisory services across Emerging Asia where population growth and accelerated urbanization are driving the expansion of domestic demand.
Key sectors for the firm include energy, real estate, infrastructure, financial services and consumer products.
Asiya also provides co-investment opportunities as well as research and advisory services on direct investments, acquisitions and joint ventures. In addition to its presence in Hong Kong, the firm operates Asiya Investments Dubai, its investment advisory arm, located within the Dubai International Financial Center. Both are wholly owned subsidiaries of the firm’s corporate office in Kuwait.

What's happening around Saudi Arabia

RIYADH: The Ministry of Education has suspended all parallel education programs, except in medical and engineering specialties, as well as bridging programs for health diploma certificates.Education Minister Azzam Al-Dhakil gave directions to the rec...
RIYADH: The Cooperative Health Insurance Council said it had suspended operations of six medical insurance companies for violating health insurance regulations by issuing insurance policies without completing the required documentation and violating...
JEDDAH: A local survey found that almost half of Saudis abide by rules and laws in public places outside the Kingdom more than they do inside the country.More than one-third of the respondent sample said they violate road traffic signs and directions...
DAMMAM: A 50 percent decline in the prices of some types of fish in the Dammam Central Market was noted compared to the previous month.Fish sellers attributed this decline to an increased fish supply and fall in demand from hotels and consumers durin...
RIYADH: In a two-day operation, police arrested 343 beggars including women and children during the holy month of Ramadan.A police officer said the raid was carried out in the Salehiya district and 220 of those arrested were women from Ethiopia. “Mos...
RIYADH: The Civil Defense has rescued 105 pilgrims trapped in vehicles and buildings for various reasons since the start of Ramadan. During the first 10 days of the month, it also had to deal with 255 complaints, which included 150 accidents due to f...
RIYADH: Hotels in the capital have made special arrangements by setting up Ramadan tents, where diners can visit to begin and break their fast with special suhoor and iftar meals during the ongoing fasting month.As the Ramadan tent is a popular pheno...
JEDDAH: Kaddadin, or unlicensed transporters, say there is good money to be made during Ramadan especially in transporting Umrah pilgrims from Jeddah to Makkah and back.During this month the number of visitors doubles or triples which means the price...
RIYADH: The holy month of Ramadan is lively at night following Taraweeh prayers. Nights are turned into days during the month in the industrial area where there is a large concentration of automobile workshops.The industrial areas are well illuminate...
RIYADH: The Saudi man behind the green project that ensured 3,400 trees in Khurais in the Eastern Province for a government firm has been approached by a Kuwaiti oil company for a similar project. “After learning about the project in the Eastern Prov...
RIYADH: A total of 1,300 Gambian pilgrims will come to the Kingdom to perform Haj this year, Ambassador Omar Gibril Sallah said on Thursday.“We hope that the pilgrims will observe the fifth pillar of Islam in peace and harmony and may Allah accept th...
RIYADH: The Saudi Commission for Tourism and National Heritage (SCTNH) and the Disabled Children’s Association (DCA) have launched a traffic safety campaign, to reduce the number of accidents that cause disability.Prince Sultan bin Salman, the SCTNH...
JEDDAH: The holy month of Ramadan is a period when non-Muslim expatriates too abstain from eating, drinking or smoking during the daytime out of respect for Muslims who fast from dawn to dusk and also because it is healthy. The expatriates are also...
JEDDAH: The Interior Ministry said on Friday that it thwarted a plot by terrorists to attack targets in the Kingdom.Officers from the ministry raided a house in Taif where the suspects were staying and arrested three men, seized Daesh flags, gun sile...
Jeddah: The Gulf Cooperation Council’s (GCC) interior ministers have vowed to take decisive action against those trying to undermine the region’s security and social fabric.At an extraordinary meeting held in Kuwait City, the ministers condemned the...

Stay Connected

Facebook