JEDDAH, 17 December 2002 — The National Commercial Bank (NCB) and Deutsche Bank (DB) have announced the launch of their Islamic EquityBuilder Certificates yesterday.
This is a unique class of investment products for Islamic investors that fully comply with Islamic principles of investments. It was approved by the Shariah Control Committee of the NCB in relation to a Shariah fatwa released on Oct. 30, 2002.
The certificate is the result of two years of planning and collaboration between NCB and DB. It uses an objective and transparent quantitative strategy, rather then an active management strategy. Islamic EquityBuilder Certificates offer investors the choice of investing in one or more regions, or globally, and can be used as portfolio building blocks with the objective of building long-term wealth and diversifying risk.
“With these certificates Islamic investors can now have access to a quantitative trading strategy that offers a superior performance potential in a cost-efficient way and at the same time is consistent with their principles,” said Abdul-Kareem Abu AlNasr, deputy general manager of NCB. “This is a powerful and complete solution that bridges the international capital markets and the Islamic investor base.”
The new class of investment products provides liquidity, transparency, diversification and accessibility in one package. They are the first Islamic products to be listed in the conventional market on a mainstream stock exchange and are easily tradable. “There has been explosive growth in quantitative asset management, which has led to increased interest from private investors in such products. The challenge has been to develop a superior quantitative strategy while maintaining Shariah compliance,” said Saleh Romeih, head of global markets coverage for Middle East and South Africa at Deutsche Bank.
“We believe that the Islamic EquityBuilder Certificates will attract Islamic investors around the world who seek efficient access to global markets.”
In this respect, investors in these certificates can now have access to a quantitative trading strategy that offers superior performance potential in a cost efficient way and is consistent with their Islamic principles.
“The Islamic EquityBuilder Certificates takes advantage of Deutsche Bank’s global platform and innovative product design and the NCB’s market presence and expertise in Islamic investment,” Said Nizar Al Shubaily, head of assets management of NCB Investment Services Division.
According to NCB investors can invest in the largest stocks worldwide with the most improved 12-month earnings outlook. The stocks are rebalanced every quarter without the disadvantage of high transaction costs and taxes.
The primary offering of the Islamic EquityBuilder Certificates closes on the Jan. 31, 2003.
The National Commercial Bank is the Kingdom’s leading investment funds bank, and accounts for 47.2 percent of all investment funds in the Saudi market.