Dubai Bank Launches Al Muhafez

Sunday, June 25, 2006

Dubai Bank has announced the launch of Al Muhafez, a Shari’a compliant investment certificate, which will give investors investment exposure to a basket of Shari’a compliant UAE stocks and at the same time providing them with principal protection.

Al Muhafez is a uniquely structured investment certificate offering investors two investment options. Al Muhafez 100 will have an investment term of five years, with 100% principal capital protection, and Al Muhafez 80, which will have a two and a half year maturity with 80% principal protection. Both products also allow for an early exit option after only one year, which will be linked to the net asset value of the investment at the time of early exit, but principal protection will only be applicable if the certificates are held to maturity.

The certificates have the novel feature whereby the initial protection provided by Dubai Bank has the potential to increase over the term of the investment. This possible increase in principal protection is linked to an amount that equals 80% of the highest net asset value of the investment ever recorded over the term of the investment. If this amount is higher than the initial protection provided, the bank will extend its principal protection to the higher amount. Dubai Bank’s CEO, Abdulaziz Al Muhairi commented, ‘Al Muhafez is designed to enable investors to benefit from the potential growth in the UAE stock markets, whilst protecting their investments against the volatility and short-term market corrections, which have recently plagued capital markets in the region and beyond. Dubai Bank’s decision to create Al Muhafez was also in response to the growing demand for innovative Shari’a compliant investment products in the region, as well fitting in with our stated strategy to become an Islamic financial institution’.

Moukarram Atassi, Investment Services Group Head at Dubai Bank added that ‘Al Muhafez plans to take advantage of the current attractive valuations in the equity markets, with a view to achieving medium to long term growth. We have designed the product to be easily affordable, with a minimum investment of only AED 50,000 and it will be open for investment by all nationalities.’

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