In their first deal together, Kuwait Finance House (KFH) and Goldman Sachs Bank signed an agreement to make a $50 million portfolio, which is considered the first of its kind that works in "Motajara" in commodities, according to the "Selem" system. Because of that, KFH has added a Sharia compliant product to a $1 trillion. This allows Islamic financial institutions and others that are interested in entering into the global market, which contributes to joint efforts in providing a legitimate alternative worldwide.
The General Manager of KFH, Mohamed S. Al-Omar, stated after celebrating the agreement to make a portfolio in Dubai, called "Zo Al-Majaz", named after on of the old Arabic markets. It is the first investment portfolio of its kind among KFH's various investments, which was structured by using "Al-Selem" in the market of exchanging the selling and buying of international commodities. The portfolio was structured for 5 years, with the option of "Al-Takharog" at the end of every month during this period, according to the net value of the assets. On the other hand, Goldman Sachs will be an agent to restore the balance of the portfolio. This outstanding achievement came as a result of the cooperation between the to parties. KFH participated structuring the portfolio, taking into consideration our partner's knowledge on the commodities market. Goldman Sachs is one of the major and international players working in the commodities market worldwide.
Al-Omar said," KFH steps today a new step towards its continuous efforts to strengthen its relations that are built on cooperation and exchanging expertise with other major banks and financial institutions. Nonetheless, today's event is great and special in KFH's path and the Islamic finance business in general. The global commodities market is dramatically growing and has a great variety, which made us take advantage of these benefits. Moreover, the portfolio works according to a Sharia product, which is the selling of "selem". It's an addition to the products and services that take the Islamic financial business to broader horizons and new markets. It also makes it a real alternative and a suitable option for the global economy in all the economic and investment businesses. It does not limit it to one form or structure. KFH reinforced its status in using various "sharia" products, like "Ijarah" , which was moved from simple products to strategic commodities like ships and planes. Using this portfolio, KFH expands the selling of "selem" today and stresses its importance and authority to be applied in the markets and different products. We expect great return on investment as a result of the way the portfolio works, which is built on actual buying and selling of a selected international group of commodities. The capital value of the commodity market more than $1 trillion by dealing with more than 25 international commodity in a group of specialized stock exchange markets worldwide. This gives suitable investment chances in buying and selling these commodities according to supply and demand, which its markets are witnessing, and achieving rewarding profit, by cooperating and benefiting from Goldman and Sachs' expertise in this field."
Selling of "Al-Selem"
Al-Omar mentioned that the portfolio's business depends on using the structure of "Al-Selem" in buying and a selected group of international commodities, with a predefined amounts and rates. The money sh