Mahmoud Suliman-Rey, Head Division Director MENA & Asia of Switzerland's Liechtensteinische Landes Bank (LLB) has announced the launch of two investment funds designed to meet investor's needs and to generate funds amounting to $2 Billion. The subscription proceeds will be invested into the banking, financial services, telecom, real estate, construction, industrial and shipping sectors in the promising GCC-MENA region. Liechtensteinische Landes Bank (LLB) has since long been studying to becoming part of the UAE's economy miracle in particularly and get involved in the rest of the GCC, in general. It has been less than one year now, the LLB opened its representative office in Abu Dhabi to acknowledge its growing influence as the world's oil and investment capital. After careful market analysis, Liechtensteinische Landes Bank decided to launch two investment certificates, first time in the region. With the development of banking and financial centre, it is expected that many more products would be launched here after the Free Trade Agreements with European Union and USA is signed. The Gulf and MENA region is more promising in terms of economic dynamics which is evident from $1.5 trillion investment plans in next 6-8 years. One reason is region is opening up, liberalization, investment into the infrastructure will pay back the UAE and GCC in a big way. The GDP which has grown significantly will no doubt enter into double digits in next 2-3 years times. The promising economic projection are for real and would have its enormous impact on all sectors of economy, like banking, services, tourism, trading, petrochemicals and manufacturing. With economic activity booming, the savings level would remain high. This exciting story of economic growth is one reason for us to be here, as have designed such investment products that can sweep the market. The Middle East Growth Sector Certificate (MEGSC) and the Middle East Pearl (MEP) are the two innovative investment products, which have been designed for the Arab market.
The proceeds under the Middle East Growth Sector Certificate (MEGSC) will be invested into a basket of 12-shares picked up from the growing construction, financial services and real estate sectors. These diverse sectors will also spread the risk. The Shari'a-compliant certificate offers a direct (1:1) performance participation, without maturity limitation. The Certificate will invest into GCC-MENA's top companies like Al Khaleej Development Company, Amlak Finance, Dubai Islamic Bank, Union Properties, Qatar National Bank, Qatar Islamic Bank, Emaar and Solidere.
The Middle East Pearl (MEP) with Capital Guarantee will invest its funds into the ABN Middle East Index composition, comprising 30-shares, selected on the basis of market capitalization weightage. From Qatar following are the companies: Qatar Islamic Bank, Qatar Telecom, Qatar National Bank, Doha Bank, Industries Qatar, Qatar Gas Transport and Commercial Bank of Qatar. The companies included from Kuwait are Public Warehousing, Gulf Bank, Commercial Bank of Kuwait, Mobile Telecommunication, Kuwait Finance House, National Bank of Kuwait and Wataniya Telecom. Five companies have been included from Egypt: Orascom Telecom, Vodafone Egypt, Telecom Egypt, Orascom Construction and Alexandria National Iron & Steel. From the UAE, Emaar Properties, Etisalat Telecom, Dubai Islamic Bank, Union National Bank/Abu Dhabi, National Bank of Abu Dhabi, ADCB, First Gulf Bank, Amlak, Aldar Properties and Dubai Investment Company while Arab Bank from Jordan is also included in the list of top 30-companies in which LLB would make its investments. About 50 per cent of the funds will go into finance; 26 per cent in telecom; ten per cent in real estate; seven per cent in industrial; four per cent in shipping and three per cent in construction sectors. The Capital Guaranteed Note, which carries maturity period of 4 or 5 years. The Guarantor has been rated Aa3 by Moody's and AA- by S&P.
Silent Features:
This capital guaranteed note stands out from other investment products available in the market in more than one way. Upon maturity the capital is guaranteed while maximum exposure is 150 per cent, if the market goes strong up. As the value of the index component will change, its allocation may change as well. For example if the value of the index component increases, its allocation in the dynamic strategy may increase and therefore the participation may rise further. The product can be offered to a secondary market three times a week with a maximum bid/offer spread of 4.5 per cent.
The institutional as well as individual investors can subscribe to the product with minimum investment of $500,000 to the Middle East Pearl while minimum subscription of $10,000 for the Middle East Growth Sector Certificate. Subscription will commence on July 15th and to continue till August 30th.
It is the right time to invest in shares as indices that have crashed recently. But, since fundamentals remains strong nothing to worry. The region's equities have a history of performing very well over last five years, which is reflected by the benchmark Dow Jones DIFC Arabia Titans 50 Index, showing a growth of over 200 per cent. Valuations in certain markets are reaching attractive price earnings multiples after the strong corrections. And the given the strong economic growth expected in the next several years, we expect earnings yields to be very rewarding and strong. At present levels market values are worth buying for good returns. There is no change in the strong economic fundamentals and abundance of liquidity flowing around in the economies of the UAE and Gulf. It would continue to be strong as ever which will push the prices of the shares up, provided one make right decision as right time.
LLB is organizing road shows in Manama and Saudi Arabia in the next week to market the two products.
-Ends-
For more information please contact:
Mahmoud Suliman-Rey
Head Division Director,
MENA & Asia
Liechtensteinische Landes Bank
Representative Office
Abu Dhabi
02-6264088
02-6273837 (fax)
050-8181538 (cell)
Nico Tschui
Portfolio Manager
02-6264088
02-6273837 (fax)
050-8181592 (cell)
© Press Release 2006
