CIMB Islamic has launched a new ten-year, 100% capital-protected structured investment linked to a basket of three indices; the Eurostoxx50, Hang Seng China Enterprises and S&P500.
CIMB Flexi Select NID-i is a Shariah-compliant product structured on the concept of restricted mudharabah and offers investors a choice to switch between a variable or fixed guaranteed coupon every two years. The variable coupon will offer an average return of 5.85% per annum.
The product's variable coupon, which is subject to the best performer among China, US and Europe reference equity indices, allows investors to review their outlook every two years and make decisions in line with their investment views, said Peter England, head of CIMB retail banking.
In order for the variable profit to be paid out, only one among the three indices has to close at or above its initial level on the observation dates of the relevant period, he added.
At the end of every investment period of two years, investors have the option to switch to a fixed rate of 3.5% per annum for that investment period or continue to invest in the variable profit payout option. The variable profit payout will increase by 0.5% per investment period. At maturity, investors will receive 100% of initial capital along with the final coupon.
"We are very optimistic over the performance of this product as we expect potential economic growth in these major markets, driven mainly by private sector demand, especially in China," he said.
Going forward, England expects CIMB Islamic will launch between three and four more products this year and said he is confident that sales of this product will reach the maximum subscription amount of MYR150m ($49m).
The minimum investment is MYR65,000 ($21,200) and the closing date is 25 January.
This product appears in Recent Additions (Malaysia).