CAIRO: Commercial International Bank (CIB) launched Monday an open-ended investment fund named Hemaya, with a yearlong capital protection. According to the bank, Hemaya is the first of its kind in Egypt, allowing monthly subscriptions and redemptions without any added fees, officials said at a conference. The public offering, which began Monday, offered LE 200 million of initial capital with a nominal value per certificate of LE 100. The bank set the minimum initial subscription at 50 allowing investors to join the fund for just LE 5,000. It is issuing 2 million certificates with the bank subscribing to 50,000 and offering the rest to the public. “People are moving away from stock markets to fixed-income securities and bank deposits and this is why we have launched this new financial product that is 100 percent protected,” Mohamed El-Toukhy, CIB's CEO for consumer banking, said. “The timing of this product is very important; we are trying to meet customer demand in a time where the financial markets, and specially the Egyptian stock market, are going through a tough time,” he added. The new fund will be suitable for a diverse range of consumers, individuals, corporations and investors, said El-Toukhy. “The fund aims to provide an investment vehicle that offers investors the opportunity to invest a maximum of 25 percent of the fund's value in the Egyptian Stock Exchange with the remaining percentage invested in fixed-income investments,” he explained, which may attract investors back to the stock market through the fund. The LE 5,000 minimum means that the bank is targeting all investors, mainly small investors, “since this is considered a very affordable amount,” he added. The banks aims to encourage an investment culture among small investors, making them think more in the long run while protecting them when liquidity is needed. The nature of an open-ended fund allows costumers to exit at no added fee. Hemaya, he added, will be suitable for insurance companies and pension funds, catering to customers that want to diversify their investments in the capital market or investors who accept medium risk, investing some of the money in the stock market with the insurance of being protected after a year. CI Assets Management, an affiliate of CI Capital Holding, will manage the fund. Karim Helal, CEO of CI Capital, said, “The main causes of fluctuations and [the] volatile nature of the Egyptian Stock Exchange is that the investment culture in Egypt is weak, or even non-evident.” The way individual investors look at the stock market is a naïve and immature, he added. “In Egypt trading is still based on rumors and speculation and unprofessional and irresponsible trading by many brokerage firms,” Helal said. This is where the fund comes in, he added, “protect[ing] investors from the fluctuations of the stock markets, while enabling them to take advantage trading by our experienced investment team,” Helal said. “We are trying to fight the growing feeling of distrust in the stock market, which is a main driving force behind the economy's growth,” he added.
