UAE- National Bonds unit holders surprised over falling rates 

(MENAFN - Khaleej Times) It was a surprising Saturday for National Bonds unit holders when they received an email in the morning that revealed a lower profit rate for 2012 compared to 2011 as they were expecting higher return, considering the overall improvement in all the economic indicators in the UAE.

The leading Shariah-compliant savings scheme announced a profit rate of up to 1.5 per cent for 2012 that covers the period from January 1st 2012 to December 31st 2012.

"I would say it was a surprise and the better word is shock for me when I got an email this morning from National Bonds for the profit rate," Tahir Siddiqui, a Pakistan national, told Khaleej Times.

"I was expecting at least more than last year [profit rate]," Siddiqui added. It was January 2009 when National Bonds surprised its bond holder by announcing the highest ever profit rate of 7.07 per cent for 2008 since its establishment in March 2006.

"I bought National Bonds in February 2009 after its profit announcement and adding more and more every year for a good rate, but the [profit] rate started declining since I purchased," Faisal Khan, an Indian national, told this scribe.

Since the highest profit rate in 2008, National Bonds rate of return continued to decline and never crossed four per cent mark in the following years. The profit rate fell to 3.54 per cent for 2009, increased to 3.78 per cent for 2010 and again dropped to two per cent for 2011 period.

In its latest announcement, National Bonds claimed healthy annualised returns of 2.62 per cent on its savings scheme for 2012. "The annualised returns comprise of a profit rate of up to 1.5 per cent and earnings through 501,032 prizes and incentives equal to 1.12 per cent distributed during 2012 from the company's own funds," according to an email statement issued on Saturday.

The statement said that National Bonds' proactive initiative to promote a culture of saving among local and expat communities has driven its number of bondholders to 690,000, marking a 5.78 per cent increase as compared to 2011. Of this, nearly 10 per cent comprise of UAE residents from over 200 nationalities, validating National Bonds sustained efforts to raise awareness about the long-term benefits of saving.

"The rise in the number of bondholders is a clear indicator that both individuals and families are paying more attention to their future financial wellbeing. We anticipate a quantum leap in the attitude to savings among the communities we target. We are confident that the cumulative annual returns, which averaged 5.6 per cent during the period 2006-2012, will emphasise the advantages of adopting long-term saving plans whilst cascading the culture across a larger section of our society," said Mohammed Qasim Al Ali, chief executive officer of National Bonds Corporation.

Since its inception, National Bonds has rolled out periodic initiatives to encourage all segments of the society to adopt appropriate savings plans. This priority has gained added significance since the 2012 National Bonds Savings Index, indicated that a staggering 87 per cent of the UAE residents believe their current savings are insufficient for the future and seek low risk investments and savings opportunities.

"Despite the continuous changes in the economic landscape, National Bonds remains committed to change the prevailing consumerism mind sets by encouraging the society to adopt a culture of saving for a secured future. In pursuit of this objective, National Bonds works relentlessly to make saving a rewarding experience. Our Scheme's strategy is to provide sustainable returns on bondholders investments while offering a rewards program that is second to none," Al Ali added.

As part of its efforts, National Bonds has introduced 119 new millionaires through its rich rewards programme, the largest-of-its-kind in the region. Having awarded 1.8 million prizes to date for bondholders, the saving program driven by the National Bonds Mudaraba fund has boosted returns on investments for customers by more than Dh350 million from rewards donated by the Company (Mudareb) alone.

By Abdul Basit