Islamic Hybrid Instrument

Islamic Hybrid Instrument

The Islamic Hybrid Instrument (“IHI”) is the latest addition to the participation in IGD Group’s (“IGD”) business of trading and manufacturing of gold articles, jewellery, IGD objects. This IHI aims to generate consistent returns with minimum volatility over a short to medium term.

Under the normal trade, the business generates a gross profit margin of 8.33% which is achieved from the trading and manufacturing of gold articles, jewellery and other IGD objects from purity 9999 to 9166 and selling at the price of purity 9999.

The profit to be distributed to each party is therefore being ratio of 50:50. The IHI is structured with two options, providing the Rabb al Mal (the owner of capital) alternative ways of access to participating in this Qirad (the business).

Option 1: Pegged Principal and Profit

All transactions are in IGD.The principal and profits are pegged at the IGD selling rate and paid out at that rate regardless of the prevailing IGD rates.

Option 2: Float Principal and Profit

All transactions are in IGD. The principal and profits float according to the prevailing IGD rate. Th is option also has an added feature of a regular repayment has indicated in the following table.

• Minimum participation
  25 IGD (Individual) / 100 IGD (Corporate)
  
• Upfront fees
  None
  
• Maturity date
  Depending with choice of participation
  
• Payment of profit distributions
  Quarterly
  
• Early termination
  In the event of a request for an early termination by the Rabb al Mal, all monthly profits paid out, as at the date E-Qirad receives the Rabb al Mal’s request for a refund, will be deducted and returned to E-Qirad. The balance of participated IGD will then be refunded.

Posted by syarifuden at 4:02 PM
Thursday, January 4, 2007

Content take from http://gold-dinar.blogspot.com/