UAE-based Abu Dhabi Islamic Bank (ADIB) said it is offering a new 100 per cent capital-protected note that gives investors exposure to European equities.

Having suffered in the wake of the global economic crisis, European equities are trading below their historical average price-to-book multiple of 1.9 times. They are therefore offering relatively high dividend yields with the prospect of capital gain as the euro-zone economies gradually recover, said a statement from ADIB.

The two-year sharia-compliant note is suitable for risk-averse investors looking for modest returns. It is linked to the performance of the Euro Stoxx Islamic 50 Index, which includes 50 stocks in nine different markets in the Euro Zone, and guarantees that the full investment is repaid at the end of two years.

The note is part of a series of investment solutions offered by ADIB that offer the prospect of low risk and modest returns, while allowing investors to diversify their portfolio.

In September, the Abu Dhabi lender had issued a similar 100 per cent capital-protected note tracking the Dow Jones Islamic Market Titans 100 index. It had also previously offered notes that provide exposure to the global automobile industry and commodities.

The notes are screened by an independent supervisory board to ensure they meet the Islamic investment criteria, including on ethical grounds and on levels of a company’s debt.

The Euro Stoxx Islamic 50 Index includes large-cap European companies, such as oil and gas giant Total, industrial goods manufacturer Philips, and automobile maker Porsche. The index has given a return of nearly 40 per cent over the last three years, and nearly 80 per cent over the last five years.-TradeArabia News Service