Shamil Bank, a leading Bahrain-based commercial and investment bank, today announced the launch of the 100% capital protected Shamil Navigator Modaraba (“Navigator” or the “Modaraba”), an innovative, Sharia’a compliant investment product that gives investors an exposure to the best returns achieved on a basket of global equities and commodities.
The subscription is open for one month only starting on May 28, 2007 and closing on June 28, 2007.
As a sign of confidence in the product, Shamil Bank will co-invest, from its own funds, an additional 10% of the total capital raised in the Class A investment pool at the close of the subscription period.
The Navigator is a 3-year structured product with 100% capital protection which provides exposure to two profiles of diversified assets comprising global Islamic equities, as well as commodities. The product differs from other capital protected investments currently in the market through its ability to “Navigate” between the better of the two performing profiles at maturity (equity overweight or commodity overweight) to provide for a participation in the best performing profile.
Commenting on the product, Mr. Ahmad Tayara, Head of Investment Banking at Shamil Bank said: “By offering capital protection at maturity, the product is ideally suited for those investors who would want to take a balanced exposure to global equities and commodities, without risking their invested capital”.
Mr. Tayara said: “To ensure that investors get the best returns from both global Islamic equities and commodities, the Navigator takes an exposure on two profiles, an equity overweight profile (75% equity, 25% commodities) and a commodity overweight profile (75% commodity, 25% equity). The basket of equities consists of an equally weighted exposure to 18 Islamic stocks selected from the Dow Jones Islamic Index while the basket of commodities consists of an equally weighted exposure to 4 commodities (excluding gold) and 4 indices. At maturity, the Navigator would measure the performance of both profiles. Investors would first receive their invested capital, and then the best performance among the two profiles, multiplied by a predefined participation rate (70% for Class A and 35% for Class B)”
Commenting on the two investment classes, he added: “The product offers the flexibility to cater for two classes of investors: Class A Investors receive distributions only at maturity based on 70% of the return of the best performing profile in addition to their invested capital. Class B Investors receive distributions close to 2% and at maturity 35% of the return of the best performing profile in addition to their invested capital”.
He added: “Since we are upbeat on the medium term outlook for global equities and commodities, Shamil has decided to co-invest in the product along with our investors, which should give them additional confidence in the expected returns of the product”.
Mr. Tayara continued: “Due to the diversity of the underlying assets and the equal weight allocated to each one of them, investors gain an automatic hedge against the swings in the global equities and commodities markets while investing a minimum of US$ 10,000 in the Navigator and gaining exposure to global financial markets. Add to that the feature of “capital protection at maturity” and we have a product which would effectively suit the risk appetite of the majority of retail investors”.
“Investment Banking has always been keen to structure and offer retail products to complement the range of products and services offered by Shamil’s retail banking to their valued customers.
“While retail products do not form the bulk of the Investment Banking product offering, we make it a point to release a few of them in the course of a year to cater for a wider investors’ audience and create further visibility to Shamil Bank" Mr. Tayara concluded.
About Shamil Bank of Bahrain B.S.C.:
Shamil Bank of Bahrain B.S.C. (Shamil Bank) is a leading Islamic commercial and investment bank incorporated in the Kingdom of Bahrain. The Bank has grown steadily since 1982 to become a leading Islamic financial institution with a shareholding equity of US$ 353 million as at 31 December 2006.
The Bank provides a diverse range of products and services that cater to the financing and investment needs of individuals and institutions. It conducts its business in compliance with the principles of the Islamic Sharia.
Shamil Bank is a subsidiary of Ithmaar Bank B.S.C., a full service investment bank with a paid-up capital of US$360 million. Ithmaar Bank has a 60% shareholding in Shamil Bank.
Shamil Bank operates a network of local branches and maintains a presence in overseas markets through its subsidiary, associated and affiliated companies. Both Shamil Bank and its majority shareholder, Ithmaar Bank, are listed on the Bahrain Stock Exchange.
The Bank has set a strategic mission to become a premier bank, recognized for developing, arranging and distributing superior and value-added products and services that conform to the Islamic principles and meet customer needs.
The philosophy of Islamic finance is based on the redistribution of wealth. Shamil Bank is distinguished by its unwavering commitment to Islamic values and will continue to support the employment of wealth in productive assets, investments, trade and in creating value for the society at large. The Bank is committed to excellence in fulfilling its responsibility and enhancing value to its customers and shareholders.
The Bank's activities are supervised by the Central Bank of Bahrain and a Religious Supervisory Board. The financial statements of the Bank are audited annually and reviewed quarterly by an international audit firm. These statements are subsequently published in the newspapers.
