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).
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.
