Business | General

National Bonds amends prize structure

More focus to be given on women, kids, employees

  • BY Cleofe Maceda Senior Reporter
  • Published: 00:05 April 23, 2013
  • Gulf News

Dubai: The National Bonds Corporation on Monday announced it is restructuring its prize allocation and reducing the minimum subscription requirement to enter the draw from Dh3,000 to Dh100.

The new rewards structure came on the heels of slowing bondholder profits, but National Bonds stressed that the purpose of the programme is to further strengthen the savings culture in the country and focus on untapped segments including women, minors and regular savers.

The company reported last month an annual profit rate of up to 1.5 per cent for last year, the lowest since the launch of the Shariah-compliant savings scheme and a far cry from the 7.07 per cent return in 2008.

Under the new scheme effective May 1, 2013, there will be one cash award every minute or a total of 1,440 cash awards daily at Dh50 each. The daily rewards will be distributed to 200 female bondholders, 200 minors and 200 customers who save regularly through a direct debit arrangement with their bank or employers.

The new structure, which continues to award Dh1 million every first week of the month, will effectively double the number of weekly awards to be given away, but National Bonds maintained that their annual prize budget, which amounts to Dh46 million, has not increased.

“We want people to change the way they think. We don’t want them to borrow and spend. That’s the key message,” Mohammed Qasim Al Ali, CEO of National Bonds Corporation, told reporters at a press conference.

The monthly awards also include two luxury BMW cars, two gold bars and two scholarship grants worth Dh50,000 for minor bondholders. “The reward structure has been expanded to include double the number of weekly awards, which will be distributed across the two categories of UAE nationals and expats,” the company said in a press statement.

Al Ali said the new initiative is a product of a series of surveys conducted by National Bonds among its bondholders and is designed to link the rewards to people’s aspirations and reinforce the habit of saving.

“Our bondholders keep telling us how to improve our offering. We do online surveys. We get instant feedback through the surveys that we do and the surveys revealed that people would like to save for retirement, housing, children’s education, emergency fund and also for other things like marriage and travel abroad,” he pointed out.

Al Ali also revealed that since its inception, the savings scheme has grown into a Dh5.5 billion fund as of the end of March and their customer size has recently expanded to 700,000 individuals. Their assets are invested in different sectors such as fixed income sukuks, real estate, money market instruments and a limited portfolio in equity markets.

Mohammad Bitar, the company’s chief strategy and risk officer, said that between 2011 and 2012 alone, the number of issued bonds increased by 16 per cent and its customer base by 6 per cent.

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