Thursday, March 02, 2006

National Bonds

I meant to blog about this story when it came out a couple of days ago. Modelled on the UKs Premium Bonds, investors can hope their 10 dirham stake wins them one million dirhams. And if it doesn't, you still have your stake in the next monthly draw. And investors will get a bonus each year- a slice of 10% of the scheme's profits. And it's Shariah-compliant (how they work that out is beyond me).

Just as the UK scheme has a friendly computer called ERNIE (Electronic Random Number Indicator Equipment) to choose the winning numbers, the UAE one will have AHMED (Automatic Hopeful Millionaire-Enabling Device) doing the honours.

Gonna get me some...


Anonymous DIL said...

hope you are luckier than I

3:58 pm  
Blogger nzm said...

Let's hope that the "Shariah-compliant investments" that the bonds will be invested into will show a healthy return.

Otherwise it's going to be another case of "it ain't worth the paper it's printed on".

But people will be suckered into the lure of winning the big cash prizes.

I had some of these in NZ - never won a cent!

4:22 pm  
Blogger John B. Chilton said...

Sounds eerily like a Ponzi scheme.

Nothing can guarantee a 10% return. The closest thing might be a corporate bond, but even there bankruptcy does occur. At least with a corporate bond, the bonder hold has priority claim over the remaining assets.

But in this scheme what are the assets? Show me the assets.

6:46 am  
Anonymous Anonymous said...

Not sure why some are skeptical of the scheme.

Been looking at the UK, NZ & Irish schemes and none of them offer any return other than the prizes. Here it's 10% of any profits earned through the investmnets and being entered in the monthly draws. It sure sounds much better than a savings account.

2:34 am  
Blogger Shafique said...

John - they aren't promising a 10% return but promising to distribute 10% of the profit made on the scheme.

The assets are basically the difference between the money invested and the prizes (which seem to be fixed each month).

The UK premium bonds basically pay out the interest earnt on the pool of money as prizes, and here the pool of bond money should eventually become self-sustaining.

At least with the bonds, there is some guaranteed return on the capital each year (the 10% of profit..which may turn out to be peanuts).

The clever thing is that by keeping the prize money fixed, over-subscriptions by people means lower chances of winning and greater profits for the fund.

5:34 pm  
Blogger NIMRz said...

I bought some bonds as a trail in order not to put all my eggs in a basket. Since April 2006 till now Dec2007 not even 1 dirham has been added to my bonds! And when I called them to make sure nothing is wrong, they said "well you have to wait to get your fortune at the first quarter of 2008". Well people it's no more a yearly profit. 2 years has passed.

In addition, I'm a bit worried about from where do they give the millions as prizes?! Maybe its from our own 10% share that should be divided and that we deserve?!

8:31 pm  

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