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Thursday, 6 December 2007

NCB Capital launches world’s first Shariah compliant “al Ahli global real estate fund”

NCB Capital, the investment and asset management arm of the National Commercial Bank, has introduced the world's first Shariah compliant “AlAhli Global Real Estate Fund” (GREF), a fund that invests in companies whose activities are in real estate development across the world.

"The Alahli Global Real Estate Fund invests in a global market that is currently estimated at US$ 1.5 trillion, which is equivalent to 370 percent growth over the past ten years, and between 2006 and 2007 the market doubled in size, due mainly to major growth in the Asia-Pacific," said Sami Abdo, Head of NCB Capital Investment Services. "Within this large market, the Fund trades in the stocks of the most prominent publicly listed companies around the globe whose activities are Sharia compliant and related to real estate business such as the rental, maintenance, management and development of offices, hospitals, shopping malls, stores, restaurants and hotels."

The launch of GREF has taken the Kingdom’s investment market by surprise, since it follows only one week after the launch of the NCB Capital BRIC Secured Fund. Such rapid response to market demands more than demonstrates NCBC’s commitment to offering its customers more - at a more frequent rate than ever before – and shows that NCB Capital is wasting no time in consolidating the leading position that it has already attained.

With a minimum subscription of US$ 2,000 the NCB Capital GREF provides investors with an easy and convenient opportunity to participate in the rich rewards that real estate can offer by investing in the shares of real estate companies, rather than becoming involved in the costly and time consuming process of the direct buying of properties. The advantage in this approach is that the fund offers more liquidity to the investor than real estate property.

By introducing the Global Real Estate Fund, NCB Capital is not only keeping its promise to offer its clients more but, in this case, the leading regional investment house is also offering more by bringing a new alternative asset class to the Saudi market, a concept known as REITs (Real Estate Investment Trusts). REITs, which are like stocks for the commercial real estate industry, have high liquidity and offer higher than average returns with lower volatility. Companies listed as REITs do not get taxed at corporate level on their income because at least 90 percent of their profits are paid out to shareholders, offering higher returns.

"Due to economic and population factors, the size of the global real estate market is expected to grow rapidly over the next few years and is projected to continue increasing for many more years to come," Said Ayman Bajsair Head of Product Development at NCB Capital Investment Services. "GREF provides what the market has been demanding and puts this sector within reach of all investors, while selectively ensuring that participation is contained within the fast expanding Shariah compliant segment.”

The NCB Capital Global Real Estate Fund has been approved by the Capital Market Authority, the NCB Shariah board, and the Kingdom's Shariah Governing Body.

Summing up the advantages of this innovative new Fund, Sami Abdo concluded "In our commitment to look for more for our clients, we have introduced a world class opportunity to invest in the global real estate market, a sector which is a key component in a well balanced and diversified portfolio, and the NCB Capital Global Real Estate Fund makes it so easy for investors to get into this important new asset class without any delay." - (AB, 2 Dec 007)

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Alfalah Consulting - KL: www.alfalahconsulting.com 
Islamic finance consultant: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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