Investment Corporation of Dubai (ICD) has taken over National Bonds Corporation, a Sharia-compliant investment scheme that offers monthly prizes.
The Dubai Government investment company purchased the 50 per cent of National Bonds it did not already own, ICD announced yesterday. No terms were disclosed.
National Bonds sold Dh2 billion (US$545 million) of bonds last year and has 610,000 customers, a 9 per cent increase from 2009, the company said.
"Investment Corporation of Dubai's move to acquire full ownership of National Bonds stems from our confidence in the company's long-term potential as a dynamic and diversified savings scheme," said Mohammed al Shaibani, ICD's executive director.
As part of the purchase, ICD has appointed for National Bonds a new five-member board chaired by Khalifa al Daboos, the director of investments at ICD.
The board includes Saif al Yarabi, Abdulla Saeed Belyoahah, Ali Rashid al Mazroei and Ghulam Moinuddin Malim. National Bonds was established in 2006 as a private joint stock shareholding company.
Its primary owners were the Dubai Government, Emaar Properties, Dubai Bank and Dubai Holding.
The company operates as an investment fund, selling bonds starting at Dh10. Last year, National Bonds listed more than Dh3.7bn of investments.
It also offers weekly and monthly prizes through random drawings. Weekly prizes currently range from Dh100 to Dh10,000, and the single monthly prize is Dh1m.
Unlike most prize-based savings schemes, National Bonds also pays an annual return on investments. The company announced a 3.78 per cent return for last year, compared with 3.54 per cent in 2009 and 7.07 per cent in 2008.
The company said it also distributed 200,000 prizes last year worth more than Dh51m.
National Bonds discloses few details on specific investments. But it was a heavy investor in Dubai property in 2007 and 2008, including the delayed Dh1.5bn Skycourts project in Dubailand and the Dh800m Flamingo Creek project at The Lagoons.
But National Bonds "did not invest a penny" in property in 2009, Mohammed Qasim al Ali, the company's chief executive, said last April.
National Bonds' other investments include holdings in the property management company BCS Strata Management Services, the convenience store chain SouqExtra, the school operator Taaleem, and M'sharie, the private-equity arm of Dubai Investments.
ICD was formed in May 2006 to take over the Department of Finance's investment portfolio. It focuses on wholly or partly owned government businesses.
"ICD will bring more empowerment, progress and growth to National Bonds Corporation, which in turn will translate into even more benefits for our bondholders and the UAE community," said Mr al Daboos.
ICD's portfolio includes investments in Emirates NBD, Dubai Islamic Bank, the Emirates Group and Emaar Properties, the company that built the Burj Khalifa.