Leading regional financial institutions, Gulf Finance House B.S.C. (GFH), Kuwait Finance and Investment Company (KFIC) and Qatar Islamic Bank (QIB) today announced the launch of US $400 million Al Basha’er GCC Equity Fund - an Islamic equity fund offering investors an excellent opportunity to take part in the surging growth of the region’s capital markets.
The partners have also forged major collaborations with Abu Dhabi Commercial Bank, Gulf Bank and Gulf Finance House Commercial Bank for the Fund as exclusive placement agents in the United Arab Emirates, Kuwait and Bahrain, respectively.
The Fund, which offers monthly subscriptions and redemptions, will be under the supervision of the Bahrain Monetary Agency (BMA) and will adhere to all Mutual Funds related rules and regulations. The Fund will be jointly managed by GFH and KFIC, investing selectively in stocks of listed as well as unlisted Shari’a-compliant companies in the region.
Elaborating on the new initiative, Mr. Esam Janahi, Chief Executive Officer of GFH, said: “The Al Basha’er GCC Equity Fund will introduce investors to the active markets of the region and superior returns that are characteristic of all GFH offerings. A distinctive feature of the Fund is its partnership with the region’s leading financial institutions, which enables it to benefit from the rich pool of expertise and knowledge of the GCC markets. The launch of the Fund comes at a time when the region’s equity markets are upbeat, supported by the changing economic landscape across the GCC.”
“The Fund will capitalise on the bright prospects of the GCC markets, encouraged by buoyant oil prices, high liquidity, low interest rates and strong corporate fundamentals. The size of the Fund at US $400 million makes it the region’s most significant offering,” he said.
Riding on the success of its investment portfolio and the robust economic indicators of the GCC, the new GFH, KFIC and QIB open-ended fund will unlock the growth potential of investing in blue-chip equities with an eye on maximising returns.
Mr. Janahi added that Al Basha’er GCC Equity Fund reflected GFH’s pioneering spirit to offer innovative investment products to global and regional investors. “At GFH, we have always been driven by the desire to be innovative in our investment strategy and the GCC equity fund is another step in this direction, which will also contribute to the expansion of Shari’a-compliant investment opportunities.”
“Managed by a GFH and KFIC team with a superior track record in high-yielding investments, the Fund will leverage the wealth of expertise and regional market knowledge of the Fund Managers. Investments will be based on stock picking and the opportunistic style of management and not indexing, while ensuring efficient management of risk,” Mr. Abdulrahman Al-Saeed, Vice Chairman and Managing Director, KFIC said.
The dollar-denominated Fund aims at capital appreciation through investments in select equities that comply with Shari’a investment guidelines. It is open for subscription on a monthly basis and can be redeemed at Net Asset Value (NAV) after a two-month lock-up period. The total size of the initial offer to the market is 40,000,000 units. The fund will open for initial subscription from October 9, 2005 for one month.
“The significance of the Fund is in its prudential investment strategy that is in compliance with Islamic norms. Our studies have confirmed that there is tremendous untapped potential for Shari’a-compliant investments in the GCC equity market,” said Mr. Al-Saeed.
“Al Basha’er GCC equity fund will expand the existing range of opportunities for investors of Shari’a-compliant products. We are confident that the strong backing of its sponsors and its collaboration with several reputed financial institutions will ensure tremendous success for the Fund. The minimum initial subscription in the Fund is US$10,000, followed by subsequent investments in tranches of US$3,000. The minimum holding limit in the fund is pegged at US $3, 000,” he said.
Commenting on the launch of the Fund, Professor Abdullatif A. Al-Meer, Assistant General Manager of Investments in Qatar Islamic Bank, said: “Capital markets in the GCC are expected to continue growing at a rapid pace, spurred by liquidity and the large number of upcoming IPOs which are giving depth to the market. Investments in the market are largely driven by momentum and there exists a need for a research-based approach to investments to ensure positive returns.”
“The Al Basha’er GCC equity fund gives investors an exposure to the challenging markets through a dynamic team of fund managers, which ensures that investment decisions are fundamentally driven. Qatar Islamic Bank is pleased to partner GFH and KFIC for the fund, which brings together the premier financial institutions in the region.”
The Shari’a advisors to the fund include Shaikh Nizam Moh’d Saleh Yaquby and Dr. Abdul Sattar Abdul Kareem Abu Ghuddah.
