Adib debuts EM play linked to SG prop index

Abu Dhabi Islamic Bank (Adib) is pitching a new fully protected structured note among local investors seeking exposure to emerging market equities.

The two-year Shariah-compliant note is “specifically tailored for risk-averse investors” looking to diversify their portfolio with access to high growth economies. The note is linked to the performance of the SGI WISE Emerging Shariah Index, a proprietary benchmark developed by Societe Generale which represents 75 of the most attractive Shariah stocks from companies such as Samsung, Hyundai, Petronas, LG, and MTN.

Every quarter, the WISE model computes a score for every emerging shariah-compliant stock with a market capitalisation greater than US$2bn. According to SG, this score is based on a set of value and momentum factors that have been selected for their robustness in predicting outperformers and underperformers in the past. To further optimise the risk budget of the index, the components are also selected according to their risk/return profile.

The launch follows recent efforts from Adib and other UAE banks to bolster their wealth-management offerings as more clients seek to diversify their stock holdings, and comes after the Islamic bank introduced another capital-protected note linked to the Euro Stoxx Islamic 50 (SXISLBE) Index which was marketed in December 2014, and a similar capital-protected structure offering exposure to global Shariah-compliant stocks via the Dow Jones Islamic Market Titans 100 index issued in September 2014.

Adib is in the process of integrating Barclays’ UAE retail banking business which includes the transition of more than 110,000 customers onto the Adib banking platform following an agreement in September 2014.

The largest Shariah-compliant lender in the UAE agreed a AED650m ($177m) deal with the British bank following a tender process in which both local and international players made bids.

All Adib’s notes are screened by an independent supervisory board to ensure they meet Islamic investment criteria. The note will be available until March 21 for a minimum investment of $30,000.