DUBAI, Sept 20 (Reuters) - London-based QIB UK, a subsidiary
of Qatar Islamic Bank, plans to launch two structured
products this month including a note linked to a sukuk, its head
of asset management told Reuters.
It will be the first time in the industry that a structured
note uses a sukuk as an underlying asset, Anouar Adham, head of
asset management at QIB UK, told Reuters late on Wednesday. The
capital-protected note will be based on a five-year sukuk which
Qatar Islamic Bank is expected to issue soon, he said.
"We are planning to launch the product before month-end. We
expect this new ground-breaking structure to take off
substantially," Adham said.
The firm has raised $153 million through the first six
products of its "Hemaya" structured note programme; the previous
notes were linked to equities listed on the Qatar, Saudi Arabia
and Abu Dhabi stock exchanges.
The new product will address growing investor appetite for
sukuk, and be launched alongside an equity note based on Islamic
bank stocks listed in Qatar and Saudi Arabia.
QIB UK manages the world's largest sukuk fund with $213
million in assets as of June. It raised $100 million last year,
and has an institutional investor base of mostly takaful and
re-takaful institutions (Islamic insurance and
re-insurance).
STRUCTURES
Client concerns about liquidity and regular payment options
influenced the design of the latest products, which will feature
semi-annual payments, Adham said.
Islamic capital-protected products have started to gain
ground among investors, because of volatility in the equity
markets and growing acceptance in the industry that the
protection aspect does not violate Islamic law.
QIB UK's new product features a new type of sharia-compliant
structure as it relies on sukuk issuance for capital protection
instead of murabaha trades, Adham added. Details of the
structure could not be disclosed.
In the past, the guaranteed principal in Islamic
capital-protected products was often delivered using a murabaha,
a cost plus mark-up contract that delivers a return similar to a
zero-coupon bond.
But the industry has been moving away from murabaha because
of concerns about its legitimacy, and various alternatives have
been used including a structure known as wa'ad, a "unilateral
promise".
(Editing by Andrew Torchia)