JEDDAH, 11 April 2005 — Response to the first regional Shariah compliant Telecom Fund, launched by Al-Tawfeek Company for Investment Funds Ltd., has been positive.
The company, a member of the Dallah AlBaraka Group, one of the leading providers of Shariah compliant investment funds in the region, announced the launch in Bahrain on March 23.
It subsequently organized similar events regionwide, including in Oman and most recently in Jeddah. The Dallah AlBaraka Group is one of the largest conglomerates in Saudi Arabia with total assets in excess of $12 billion, which operates from more than 40 countries.
The Al-Tawfeek Arab Telecommunication Fund, as the new fund is called, is an open-ended investment plan incorporated in Bahrain and regulated by the Bahrain Monetary Agency (BMA) that offers an attractive opportunity to invest in the telecommunication sector of countries in the Middle East and Africa. The BMA approved the fund on Jan. 12, 2005.
“The open-ended fund will invest its $500 million target capital in listed and unlisted Shariah compliant equity and equity-related securities of telecommunications and related infrastructure companies established or operating in the Middle East and Africa,” Hassan Salim Al-Ammari, chief executive officer of Al-Tawfeek, said.
“The initial offering period is till April 23. The $500 million fund size may also be considered for increase if demand warrants,” Al-Ammari added.
Units are being offered during the initial offering period at a face value of $100 per unit. The minimum subscription amount is $25,000 for individuals and $100,000 for institutions. Minimum additional subscriptions are $5,000 for individuals and $25,000 for institutions. Subscriptions have to be deposited in AlBaraka Investment & Development Company account at Samba, National Commercial Bank, Saudi Hollandi Bank or Arab National Bank.
The administrator will calculate the net asset value per unit in accordance with generally accepted international accounting standards that do not conflict with Shariah.
The fund, which broadens Al-Tawfeek’s range of investment funds, provides investors in the region with an opportunity to invest in a recently liberalized industry where cellular telecommunications is in the early stage of the industry lifecycle and the successful experience of developed markets is being replicated.
The fund has been launched at a time when the region is potentially growing from unfulfilled demand. Africa has the highest subscriber growth rate in the world, and the process of privatization of telecom in Tunisia and Oman is expected to materialize in due course. What is more, Iraq’s three mobile licenses are expected to be offered for sale or renewal in 2006.
Al-Tawfeek Company for Investment Funds Ltd., the sponsor, registrar and placement agent of the fund, is a specialist financial investment company incorporated in 1992 in the Cayman Islands and has a capital of $304 million. It devises, structures, launches and manages Shariah compliant investment funds.
Since inception, Al-Tawfeek has launched a number of Shariah compliant investment funds covering equities, real estate, venture capital, leasing and reconstruction, raising in excess of $1 billion. It is one of the first companies to recognize that Shariah compliant investments are competitive with conventional investments at any given level of risk.
EFG-Hermes Financial Management (Egypt) Ltd. is the investment manager of the fund.
A specially constituted Shariah board is to advise on Shariah matters. It is in charge of establishing general investment guidelines, which are consistent with the principles of Shariah.
The board consists of Dr. Abdul Sattar Abu Ghuddah as chairman, and four members — Abdullah ibn Suleiman Al-Manai, Dr. Abdul Latif Al-Mahmood, Dr. Ahmed Mohieldin Ahmed and Dr. Ezzedine Ben Mohamed Khouja.