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Investment products

Investment 
 Products

Investment Products

Dual Currency Murabaha (DCM): This short-term liquidity management product is based on a regular Commodity Murabaha transaction and a Unilateral Promise (W’aad), and allows you to earn a higher profit rate on your surplus funds.

 

Benefits

  • Attractive profit rates
  • No foreign exchange fee
  • Flexibility
 

Risks

The Principal might be converted into the alternative currency at the pre-agreed strike rate and not at the spot exchange rate prevailing at maturity.

If the principal gets converted into the alternative currency and if the client wishes to convert the paid principal back into the initial investment currency at the spot foreign currency exchange prevailing on maturity, the amount of the principal in the initial investment currency may be lower than the amount of the original investment.

** Indicative Profit Rate matrix

 

Example

Client invests USD 5.0 m in a Dual Currency Murabaha for 1 month with the following details:

Base Currency USD
Amount $5.0M
Alternate currency EUR
Tenor 1 month
Strike 1.24

We can offer to the client to enter in a Murabaha in USD at a profit rate of 7.25%p.a. in exchange of the client granting the right to the bank to sell him Euro at 1.2400 at maturity (Wa’ad).

Scenario 1: If at maturity the EUR/USD is higher than 1.2400, the client will receive his principal and profit in USD.

Calculation: USD 5,000,000 + (5,000,000* 7.25% * 30/360) = USD 5,030,208.33

Scenario 2: If at maturity the EUR/USD is at or lower than 1.2400, the client will receive his principal and profit in EUR converted at 1.2400.

Calculation: USD 5,000,000 + (5,000,000 * 7.25% * 30/360) = USD 5,030,208.33

USD 5,030,208.33/ 1.2400 = EUR 4,056,619.62

Please click here for Dual Currency Murabaha Reports

  • Islamic Structured Investments: Executed through a combination of a Commodity Murabaha and a Unilateral Promise (W'aad), this product is ideal if you wish to invest your funds for a longer duration. Choices include the indices of equities, commodities, foreign exchange, or its combinations.
  • Hybrid Pick and Drop Structure: The Hybrid Pick and Drop Structure is a unique Wealth Management Structured Investment Product offered by Noor Bank. With this Shari’a compliant product, you can now invest in different asset classes, while having the security of 100% capital protection with unlimited returns – perfect for both low and high-risk investment clients.
 

Features and benefits

  • Tenor 3 years
  • Minimum denomination is 100,000 AED
  • Entry subscription fees/charges: None
  • 100% capital protected three-year investment if held to maturity
  • Early exit possible after 10 months, subject to a maximum fee of 3%
 

Investment in diversified asset classes

  • Shari’a-compliant equities (Dow Jones Islamic Market Index)
  • Precious metals
  • Soft commodities (agricultural)
  • Energy commodities (oil)
  • Brazil Real and Chinese Renminbi currencies)
  • Every observation date (every 6 months) the best performing asset class is picked and its performance recorded for the final performance calculation while dropped from the basket for further calculations.
  • Sukuk Al Musharakah: In this joint venture profit sharing financing structure, the issuer operates as an investor and the capital provider. Profit is shared in a predetermined manner, while losses are shared by partners in proportion to capital contribution.
  • Sukuk Al Murabaha: In this sale contract, purchase price is determined on a cost plus pre-determined profit, and is payable either in instalments or as a single sum. Proprietors wishing to acquire goods/commodities to be sold under a Murabaha agreement may mobilise its costs through Sukuk issues, where the Sukuk holders will own these goods/commodities and be entitled to its sale price.
  • Sukuk Al Mudaraba: This financing structure involves a contract whereby the issuer acts as the manager of the security holder’s capital. Profit is determined by mutual consent, whereas losses are borne by the owner of the capital.
  • Sukuk Al Istisna'a: The progressive payment facility of Al Istisna’a is ideal for constructors and manufacturers wishing to construct/manufacture and deliver specific assets at a future date, as per the conditional sale contract.
  • Sukuk Al Ijara: This lease is a combination of an operational lease and a finance/capital lease with certain ownership risks.