The Al Salam Bahrain bank recently announced a strategic partnership with TAIB from Brunei. The two institutions are involved in the Burj Al Safwa Tower in Mecca – a premier piece  of residential and commercial real estate. BSH:SALAM is one of 50 or so publicly-listed company trading on the Bahrain stock exchange.

I currently invest in some “TAIB deposit certificates”, which are also called “TDCs”. These offer variable returns in a range that competes with other debt instruments but give no capital protection. Yet. the impression I get when I buy them is that they are structured “like” equity instruments to address the whole “Shariah compliance” problem of calling it “debt” that pays a stream of interest payments to the lender. Instead they pay off “profits” sourced from the businesses which TAIB “invested” in on the investee’s behalf. Fascinating. I’ll call them “quasi-equity” instruments for now. One of these days I’ll research the implications of IFRS accounting for the Islamic Financial Services industry and blog aboout it.

I’ll be following the developments of the Al-Salam Bahrain – TAIB – Joint Venture which much interest, since I am quite likely, a part investor in the project.

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