Dubai's Mashreq plans $100m Islamic equity fund

Investment unit of Mashreq bank says fund is likely to be set up in the third quarter of 2013

Dubai-based Mashreq Capital plans to set up an Islamic equity fund of up to $100m in the third quarter of this year to invest in stocks across the Gulf region, given lower returns in the bond market, the company's chief executive said.

"We think there is demand in high-dividend sharia equities," particularly with interest rates currently very low, Abdul Kadir Hussain told Reuters at Zawya's MENA Asset Management conference in Dubai on Wednesday.

"Equities have very attractive yields in this region," he added.

The investment unit of Mashreq bank hopes to raise between $75m and $100m for the fund, and will seed it with a $20m investment from the bank.

Hussain said the fund would be Mashreq Capital's fourth as it now manages two fixed income funds and one conventional equity fund, with a total of $800m of assets under management.

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