DIB Launches Asia-Focused Sharia Fund
Thursday, July 07, 2011

Dubai Islamic Bank (DIB) has unveiled a new opportunity for regional investors to participate in the rapidly growing economy of Asia with a new fund targeting medium to long-term capital appreciation through investment in Sharia-compliant companies within the Asia Pacific region (excluding Japan).

DIB said that the fund is benchmarked against the Dow Jones Islamic Market Asia Pacific ex-Japan Index, and allows investors to gain exposure across a range of growth countries and industries through a single platform. The fund is being offered by Prudential Asset Management Limited, based in the Dubai International Financial Centre.

Islamic funds comply with the investment principles under the Islamic religious law of Sharia. The Sharia Principles preclude investments in businesses such as conventional financial services, alcohol, pork-related products, gambling, leisure and entertainment. Sharia principles also preclude interest bearing investments and investments in companies with unacceptable levels of debt.

Dr. Adnan Chilwan, Deputy CEO - Chief of Consumer and Wholesale Banking, Dubai Islamic Bank, said: “The Asia Pacific region has emerged as an anchor for the global economic recovery and, driven by consumption and investment, is poised for further growth. This new product is in line with DIB’s commitment to introduce pioneering, high quality financial products. It is designed for our valued high net worth customers who understand the opportunities presented by the Asia Pacific equities markets, and would like to capitalise on the same.”

According to estimates by Credit Lyonnais Securities Asia, Asia’s rapidly expanding middle-class population is forecast to reach the one billion mark by 2015. Meanwhile, Asian consumer spending is estimated to grow from USD4.3 trillion in 2008 to USD32 trillion by 2030, representing roughly 43% of global consumption.

DIB also highlights a report by the United Nations highlighting the rapid urbanization of many areas in the region, with estimates showing that the population of Asian cities is expected to increase from 1.8 billion in 2010 to 3.4 billion in 2050. This is creating "massive infrastructure investment opportunities for the private sector," the bank points out.