JEDDAH, 27 March 2005 — The National Commercial Bank’s Al-Ahli Saudi Riyal Trading Fund and Al-Ahli Global Equity Trading Fund achieved first rank internationally for the year 2004. The first fund reached the size of SR8 billion (about $2 billion and the second SR1.3 billion (about $351 million).
Confirming this, Abdulkareem Abu Al-Nasr, NCB deputy general manager, stated that the NCB will celebrate this year the 26th anniversary of the launch of the first investment fund in the Kingdom. He said the bank currently holds the largest share in the investment fund sector in the Kingdom — 41 percent of the asset total in the national banks at the end of 2004. He added that out of a total of 186 investment funds in the Kingdom, the NCB controls 28 whose asset value exceeds SR24 billion.
He stated the NCB is a pioneer in the area of innovating and launching of investment funds, which are Shariah-compliant.
Abu Al-Nasr attributed the bank’s success in the area to the trust of customers, the great performance which the funds are achieving, and the investment department’s ability to invent new investment funds, which meet the changing needs of the client that change with the market.
He said that the NCB in the past years invented many investment funds, which invest in various tools, especially the domestic ones, to meet the market demands and the clients’ expectations. This bears testimony to the importance of these products for the NCB and its constant efforts to develop them, he added.
Amer Al-Karnous, head of Business Development, Investment Services Division, said that the NCB’s Al-Ahli Investment Funds are divided into two groups — open-ended funds and close-ended funds.
Open-ended funds do not have specified time periods and do not allow the investor to participate or withdraw at any time. Such funds are of three types, which are categorized according to the rate of risk. First, the low risk short-term income funds which invest in Islamic commercial exchange deals. Second, medium risk and medial range funds which invest in Islamic bonds “deeds” and merchandise market. Third, the high risk, long-term funds which invest in domestic and international stock markets which are in compliance with Islamic regulations.
The group of close-ended funds which are funds with a specified time period and are open to documentation for a limited time and do not allow the investor to withdraw from it till the specified time is completed. The time period ranges from 18 to 36 months depending on the type of fund.
Upon pulling out from the fund, capital is refunded with profits to the investor, and after that the fund is concluded. In 1999, the bank invented a group of stock investment funds that are extremely low risks to protect capital. They named three funds under Al-Ahli funds, which secure capital, compliant to investment Islamic law, and are based on sale of Islamic down payment/deposits.