Emirates Investment Services Limited announces the latest profits of its Sukuk Fund

The Shari'a compliant sukuk fund launched its first offer period in January 2009 and began trading at the start of March 2009. The fund operates by buying Islamic bonds, or sukuk, issued by companies and governments based primarily in the Middle East and North Africa.

Since its commencement, the fund has benefited from both strong security selection and improved market conditions which have led to an indicative annualized return of 25.19%. In addition, the fund has successfully avoided sukuk that have been affected by the ramifications of the global credit crisis.

Investors in the fund are set to receive their first income distribution at the end July 2009 of 3.5% (7.12% AER). The timing of the launch was propitious as the sukuk market experienced a large sell off in the run-up to the fund's trade date. As international investors decreased their exposure to emerging market paper to meet redemptions, yields rose and value began to emerge in the asset class. Simultaneously, the market had priced in an additional default risk as the global recession resulted in a slow down of the MENA economies.

After this, a number of governments in the MENA region took action in order to support and contribute to their local economies, a move which has yielded positive results and supported credit markets. Sukuk prices therefore rose as confidence returned and additional liquidity was pumped into the region.

Deon Vernooy, Senior Executive Officer at EIS commented:

"The fund was initially launched at the bottom of the market. It has since then shown outstanding performance within a short amount of time and our research indicates that there are still several opportunities available in the sukuk market from which the fund can further profit and develop. Our expert management team at EIS is committed to generating the best possible outcomes for our valued investors. We are very pleased with the fund's current success and we continue to maintain our thorough and strategic practices."

Investors will have an extended chance to participate in the fund as a special pricing point has been declared to coincide with the valuation point at the end of the month. This fund is one of the several innovative opportunities that have been developed under the umbrella of Emirates NBD, the region's largest financial institution in terms of assets.