Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic financial institution, has launched a new capital-protected note, after the huge success and high demand to the first car manufacturing note, issued by the bank earlier this year.
The note, which matures in 18 months, provides 100 percent capital protection at maturity to minimize risk, with an expected return of up to 10 percent. The note is currently open for subscription with a minimum amount of US$30,000.
The note offers the opportunity to invest in the world’s leading car manufacturers, including Toyota Motors, Hyundai, KIA Motors, BMW and TATA Motors Ltd.
The automobile sector has performed well in 2013, and during the first quarter of 2014, sustained by recovering demand in Asia and the United States. Despite the share price rises in 2013, the majority of sell-side analysts retain “buy” recommendations on the major auto stocks.
For example, a recent JPMorgan research note predicted a cyclical upturn for the global auto industry, with BMW performing well because of the popularity of its new models, while Hyundai is expected to see its market share rise due to its newest Sonata model.
ADIB’s structured notes have been well received by investors. In January, the bank issued its first capital-protected car manufacturers note, with an expected return of up to 8 percent.
Previous investment products include three capital-protected gold notes and two capital-protected oil notes that matured at the beginning of 2013. The one-year gold note produced a total return of 15 percent, while slightly lower-risk notes returned 4 percent and 6 percent. One of the two-year oil notes produced a 17.9 percent return, with the other generating a 1.21 percent return.
This latest offering is part of ADIB’s wealth management approach to provide customers a diversified suite of investment solutions. The strategy involves developing and delivering best-in-class investment solutions tailored to meet the financial needs of customers through effective financial planning and asset allocation.
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