Shamil Bank Bahrain's capital-protected Mo

Bahrain-based Shamil Bank has launched the 100 per cent capital-protected Shamil Navigator Modaraba. Moradaba or Navigator is 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 per cent 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 per cent 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, 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".

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 per cent equity, 25 per cent commodities) and a commodity overweight profile (75 per cent commodity, 25 per cent 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 per cent for Class A and 35 per cent for Class B)."

Commenting on the two investment classes, he said: "The product offers the flexibility to cater for two classes of investors: Class A Investors receive distributions only at maturity based on 70 per cent of the return of the best performing profile in addition to their invested capital. Class B Investors receive distributions close to 2 per cent and at maturity 35 per cent of the return of the best performing profile in addition to their invested capital."

He said: "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."

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 $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" Tayara concluded.-(TradeArabia News Service)