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Thursday, 5 June 2008

KFH sets apart $50m to buy ships

KUWAIT CITY : Kuwait Finance House (KFH) announced the establishment of a new investment portfolio that works in marine transportation with a capital of $50 millions. This portfolio will acquire ships and marine vessels, and then rent them in conjunction with the British corporation Tufton. The total portfolio assets are expected to exceed $250 millions. The portfolio, which assets belong to international ship owners, is rendered a new step forward from KFH towards diversifying assets, in addition to benefiting from the global markets’ developments in the field of transportation, especially the maritime transportation.

The acting AGM for Investment Sector Abdul Nasser Al-Subeih stated in a press release that KFH is glad to work with Tufton Group in this portfolio. He added that KFH has a long, successful experience in the investment sector, especially in the various means of transportation. Moreover, KFH values Tufton’s history and expertise in the maritime business, and looks forward to working with it to make this portfolio a success by reaching $250 million in assets during the next 6 months.

He added that KFH considers this new portfolio one of its several contributions in the investment field of vital and paramount activities in global markets, like the ones related to transportation, infrastructure, communications, real estate development and other projects that are strongly linked to life in modern societies and the development of global economy.

Al-Subeih said that the portfolio would use Ijarah. This is a new contribution from KFH to expand the Ijarah economic role by using it in major projects and activities. Thus, KFH will use Ijarah in broader horizons to include strategic commodities like planes, ships, heavy equipment, real estate funds and others, instead of its current limited and shallow use.

Al-Subeih added: Maritime transportation has witnessed a boost in prices worldwide over the past few years and lucrative return for owners of ships and cargo vessels. Due to this, there has been an increase in demand on construction of ships and cargo vessels and a growth in the financing of their construction, as well as their increased rental and selling activity. The increased demand on maritime transportation coincides with the economic growth being experienced by China, India, and East Asian countries which stimulates the export and import activities of those countries. It also coincides with the increase in fuel and natural gas prices and the increase in demand on various products which corresponds to the economic growth in China, India and East Asia.

On the other hand, Tufton’s CEO Jonathan Hill stressed that working with KFH is an important milestone for Tufton, which is experienced in establishing Shariah compliant funds. He added that a bouquet of investments would be established through the portfolio during 2008. Moreover, the initial deals have been selected through global marketing, and the first deal is being sealed and documented. It will be announced once it is complete.

(Arab Times)

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