Foreign investors from eight European countries will now have the opportunity to invest in a portfolio of 20 blue-chip Gulf companies through wealth management firm Merrill Lynch’s Gulf Investible Index Certificate.
The open-ended, publicly-registered and exchange-listed product includes major industry players in Dubai, Abu Dhabi, Kuwait and Qatar, said Pierre Mendelsohn, Head of Securitised Products, Merrill Lynch EMEA. These companies are Dubai Financial Market, Emaar, Air Arabia, Amlak Finance PJSC, Dubai Investments, Tamweel, Union Properties, Islamic Arab Insurance, RAK Properties, Sorouh Real Estate Company, Dana Gas, Aabar Petroleum Investments, First Gulf Bank, National Industries Group Holding, Mobile Telecommunications Company, Kuwait Finance House, Public Warehousing Company, Boubyan Petrochemicals Company, Industries Qatar, and Qatar Islamic Bank.
Mendelsohn told Emirates Business that the index selection rules have been designed to include only stocks that have 15 per cent foreign ownership restriction or more. This is the same reason, he said, why Saudi-listed companies are not included in the index.
“The certificates are mainly targeted for residents in Germany, Austria, France, Belgium, Luxembourg, the Netherlands, Switzerland and Spain. The certificates will be listed on five European exchanges such as SWX Swiss Exchange, Frankfurt Freiverkehr, Stuttgart Stock Exchange, Euronext Paris and Euronext Amsterdam and will be available through brokers,” he said.
Mendelsohn added that the certificates can only be accessed by investors who do not reside in these European countries through private placements.
“Private placements usually require high minimum investments and are subject to the private placement regulations applicable in the country of residence of the investor,” he explained.
At a minimum requirement of 100 euros (Dh540), Mendelsohn admitted that the certificate also targets middle-income earners in the eight European states as potential investors.
The new product boasts of high liquidity features since it provides a daily secondary market that will allow investors to withdraw their investments on a daily basis.
Merrill Lynch said the certificate will enable investors to have a transparent and cost-effective investment since performance data will be made available on the internet from March through Bloomberg.
European investors can invest in top Abu Dhabi and Dubai stocks