Kuwait Finance House (KFH) declared higher return on the KD monthly international Murabaha transactions, which it manages for its customers. The return accounted for 5%-5.125%. The increase adds to KFH's achievement of highest rates of return in the market. It also represents best savings and investment instruments provided by KFH, based on the dividends it distributed for 2005 on the interrupted deposi, accounting for 6.8%, and savings account, with 4.5%.
In a press release, Abdul Wahab Al-Roshoud, Manager – Treasury Department of KFH, stated that the higher rates of return on KD monthly Murabaha transactions, which are provided as investment product through the banking branches, with a minimum subscription of KD 25,000, is due to the investment policy that capitalizes on KFH's capability and experience in the international markets with respect to the various products in a balanced, flexible manner that copes with the constant changes in the markets. The procedures enables the provision of best opportunities, especially that the Islamic financial products now constitute a major component of the majority of global markets transactions, thus paving the road for further growth and expansion over the period to follow.
"These returns compete with the returns on short-term deposits and mutual funds." He said, "The longer the investment period, the higher the return. KFH provides a set of options for the customers to invest their funds over various period, extending from 1 month to 1 year." He added. "International Murabaha service is provided for less than a month, for amounts not less that KD 500,000, thus serving the endeavors of major individual and institutional investors to increase their funds and achieve best returns thereon." He explained.
Al-Roshoud referred to the successive, positive steps carefully taken by the Central Bank of Kuwait (CBK), which have proven to be successful in managing market liquidity, localizing the Kuwaiti dinar, and coping with the developments of international and currency markets. "These positive steps provide solid ground for the investor, whether individual or corporate, by boosting the market and optimally utilizing the financial surpluses." He elaborated.
About the features of developments in some global markets, Al-Roshoud stated that South East Asian markets, particularly Malaysia, have witnessed a notable activity. "The Malaysian market has achieved high growth rates and high performance." He commented, "On the Gulf arena, the Bahraini market has also witnessed intensive activity on two significance areas: establishing new Islamic banks, and increased issues of Sukuks. This was possible to achieve due to the availability of a proper legislative structure that motivates such activity, which is absent in other countries of the region." He added.
In a step aimed at availing the opportunity for the largest possible segment of customers to benefit from the record dividend distributions, while increasing KFH's share of deposits, KFH had reduced the minimum amount of its deposits to KD 5,000 for uninterrupted investment deposit, instead of KD 25,000, and KD 1,000, instead of KD 5,000 for Al-Sidra deposit. During the 1st half of the current year, deposits amounted to KD 3.583 b, an increase of KD 798 m, or by 29% compared to the same period of the previous year.