NBK $139m fund fully subscribed
Kuwait, June 6, 2009
The Islamic KD Ijara Fund I, with a fund size of KD40 million ($139 million), offered by the National Bank of Kuwait (NBK), was fully subscribed in the first two days of its offering period.
The fund was launched in response to the increased demand for NBK’s Ijara funds which have been successful in achieving attractive returns to NBK’s clients.
“Investor flight to quality has driven the demand for NBK’s extensive expertise and conservative approach which emphasizes on attractive returns and capital preservation,” said Nabil Maroof, NBK Capital’s managing director of asset management.
The five-year closed ended investment fund provides investors with the opportunity to enjoy regular monthly lease income on a Shariah compliant basis by purchasing equipment that will be leased out to high quality companies.
The equipment portfolios of the fund will have a diverse range of equipment types, including mid-size and mainframe computers and peripherals, storage equipment, software, copiers, automotive, point of sale, telecommunications, machine tools, testing equipment and others.
Unlike NBK’s previous Ijara funds, the Islamic KD Ijara Fund I allows investors to reap the benefits of monthly income distributions at an annualized rate of 6.50 per cent in Kuwaiti dinars.
“Ijara transactions have shown that they typically outperform during economic recessions as companies substantially decrease their capital expenditure, preferring to lease their mission critical equipment instead,” Maroof said.
“Lessees also tend to retain equipment for longer periods, offsetting the increased credit losses that result from a typical recession,” he added. – TradeArabia News Service