20 May 2012
Muscat: Oman, in a bid to have its share in the Gulf Cooperation Council (GCC) asset management industry that manages $14.78 billion in assets, will finally have money market fund. In terms of products in the GCC, money market funds lead the pack with a 52 per cent share.
Leading from the front, BankMuscat yesterday launched the BankMuscat Money Market Fund, country's maiden market fund, an innovative investment fund targeted at corporates and institutional investors. A money market fund, also known as liquid fund, is a type of mutual fund that invests in low risk securities. These funds have relatively low risks compared to other mutual funds and generate returns that generally reflect short-term rates. One of the objectives of the fund would be to create and develop new securities like commercial papers in Oman.
Announcing the launch of the fund, Ali Said Ali, DGM -" Asset Management and Private Banking, BankMuscat, said that the fund is the first-of-its-kind investment vehicle aimed at offering returns with low risk and daily liquidity. The fund provides corporates and institutions an alternative investment to park their short-term cash surplus.
According to Maitham Murtadha Ghulam Husain Al Lawati, assistant manager, product structuring and advisory asset management, BankMuscat, "The fund's objective is to generate returns with preservation of capital. The fund offers daily liquidity and the fund's returns are linked to short term interest rates.-
The open-ended fund, which is open for subscription from May 22 to June 22, will invest in call accounts, fixed deposits, murabahas, wakalas, bonds with residual maturity of less than one year, certificate of deposits, commercial paper, money market funds, T-Bills and other short-term instruments issued by banks, governments, quasi-governments and other entities.The fund will invest primarily in Oman and also in the GCC countries. The price is RO1 per unit with no subscription fee.
Ali Said Ali further observed: "The money market fund offers a safe investment avenue. Against the prevailing volatile global financial and economic conditions, the fund assumes importance as a safe cash management tool. The short-term nature of investments significantly reduces the risk. The fund also offers high liquidity and yields linked to short-term interest rates. If short-term interest rates in the general economy go up, so do yields on the fund.-
The fund is managed by BankMuscat Asset Management and is regulated by the Capital Market Authority. The bank's high rating strengthens the viability of the fund, which makes available to investors in Oman a new type of instrument previously available in international markets only. Money market funds globally account for $4.7 trillion, which is 18 per cent of the global assets under management of $25.84 trillion.
The minimum investment in the open-ended BankMuscat Money Market Fund is RO250,000, while the bank's target is to raise $100 million by the end of the year.
Significant investment by the fund will be in deposits/instruments with less than 3 months maturity. The fund will not invest in instruments having maturity of more than one year. These entities or instruments should be rated investment grade by credit rating agencies such as Standard & Poor's, Moody's, Fitch or Capital Intelligence. The fund will invest only in instruments/securities that are denominated in any GCC currencies or US dollar.
Investment in deposits outside Oman will not exceed 50 per cent of the fund size and not more than 15 per cent of the fund's net asset value will be in deposits of any single entity outside Oman.
Muscat: Oman, in a bid to have its share in the Gulf Cooperation Council (GCC) asset management industry that manages $14.78 billion in assets, will finally have money market fund. In terms of products in the GCC, money market funds lead the pack with a 52 per cent share.
Leading from the front, BankMuscat yesterday launched the BankMuscat Money Market Fund, country's maiden market fund, an innovative investment fund targeted at corporates and institutional investors. A money market fund, also known as liquid fund, is a type of mutual fund that invests in low risk securities. These funds have relatively low risks compared to other mutual funds and generate returns that generally reflect short-term rates. One of the objectives of the fund would be to create and develop new securities like commercial papers in Oman.
Announcing the launch of the fund, Ali Said Ali, DGM -" Asset Management and Private Banking, BankMuscat, said that the fund is the first-of-its-kind investment vehicle aimed at offering returns with low risk and daily liquidity. The fund provides corporates and institutions an alternative investment to park their short-term cash surplus.
According to Maitham Murtadha Ghulam Husain Al Lawati, assistant manager, product structuring and advisory asset management, BankMuscat, "The fund's objective is to generate returns with preservation of capital. The fund offers daily liquidity and the fund's returns are linked to short term interest rates.-
The open-ended fund, which is open for subscription from May 22 to June 22, will invest in call accounts, fixed deposits, murabahas, wakalas, bonds with residual maturity of less than one year, certificate of deposits, commercial paper, money market funds, T-Bills and other short-term instruments issued by banks, governments, quasi-governments and other entities.The fund will invest primarily in Oman and also in the GCC countries. The price is RO1 per unit with no subscription fee.
Ali Said Ali further observed: "The money market fund offers a safe investment avenue. Against the prevailing volatile global financial and economic conditions, the fund assumes importance as a safe cash management tool. The short-term nature of investments significantly reduces the risk. The fund also offers high liquidity and yields linked to short-term interest rates. If short-term interest rates in the general economy go up, so do yields on the fund.-
The fund is managed by BankMuscat Asset Management and is regulated by the Capital Market Authority. The bank's high rating strengthens the viability of the fund, which makes available to investors in Oman a new type of instrument previously available in international markets only. Money market funds globally account for $4.7 trillion, which is 18 per cent of the global assets under management of $25.84 trillion.
The minimum investment in the open-ended BankMuscat Money Market Fund is RO250,000, while the bank's target is to raise $100 million by the end of the year.
Significant investment by the fund will be in deposits/instruments with less than 3 months maturity. The fund will not invest in instruments having maturity of more than one year. These entities or instruments should be rated investment grade by credit rating agencies such as Standard & Poor's, Moody's, Fitch or Capital Intelligence. The fund will invest only in instruments/securities that are denominated in any GCC currencies or US dollar.
Investment in deposits outside Oman will not exceed 50 per cent of the fund size and not more than 15 per cent of the fund's net asset value will be in deposits of any single entity outside Oman.
© Times of Oman 2012
