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Jul 01 2003

US$250 million Islamic bond issue listed on Bahrain Stock Exchange


Manama (Bahrain): A US$250 million issue of Islamic leasing bonds (Ijara sukuk) was listed today on the Bahrain Stock Exchange (BSE).
 
The listing brings to a total of US$1.25 billion the value of bonds listed on the BSE.
 
The bonds, which were issued on 27th May 2003, carry a maturity of five years.
 
The issue was arranged by Bahrain-based Liquidity Management Centre (LMC), in coordination with the Bahrain Monetary Agency (BMA).
 
It was the largest-ever offering of Bahrain Government Islamic bonds.
 
The rental return on the sukuk is 60 basis pints over the London inter-bank offered rate (Libor) for six months.
 
Today’s listing ceremony was presided over by HE Khalid Al Bassam, Deputy Governor of the BMA and Vice Chairman of the BSE.
 
Also present were Mr. Ali Thamer, Director, Capital Markets Supervision, at the BMA and Mr. Ebrahim Hussain Ebrahim, Chief Executive Officer of the LMC.
 
Mr. Al Bassam welcomed the listing of the Ijara sukuk on the BSE, the seventh issue of Islamic bonds to be listed on the stock exchange, bringing the value of listed sukuk to US$730 million.
 
“The listing of the Ijara sukuk issue will add value to the BSE and enhance its status as the region’s premier bond market,” said Mr. Al Bassam.
 
“It will also further enhance cross-border investment in Islamic financial instruments as well as stimulate the Islamic capital market.”
 
He hoped other leading corporates in Bahrain and the region will be encouraged to issue bonds, conventional and Islamic, and list them on the BSE.
 
“It is our endeavour to encourage bond issuance activity and to position the Kingdom as the leading bond market in the Middle East region,” said Mr. Al Bassam.
 
-Ends-
 
Notes to Editors:
The Kingdom of Bahrain is the financial capital of the Middle East, hosting the largest concentration of banks and other financial institutions in the Middle East.
 
The BMA, the Kingdom’s central bank and sole regulator for the financial system, currently regulates a total of 347 institutions, of which 180 are banks and banking-related institutions, 154 insurance and insurance-related firms and 13 capital market brokers. 
 
Bahrain has also emerged as the world’s Islamic banking hub, boasting the highest concentration of Islamic financial institutions, numbering 26, five of six key industry-support organizations as well as six Islamic insurance  (takaful) companies.
 
The BMA is at the frontier of innovation in developing Islamic financial instruments and is the first central bank to issue Islamic bonds. A rolling programme of monthly issuance of short-term securities, ‘Sukuk Al-Salam’, has been in place since June 2001. It complements the medium and long term Ijara sukuk, being issued by the BMA since September 2001. So far, BMA has made seven issues of Ijara sukuk, worth a total of US$730 million.
 
The BSE is the most open capital market in the GCC region.  Foreign investors are allowed to acquire up to 49% of listed companies, while nationals of other Gulf Cooperation Council (GCC) countries can acquire 100% ownership.
 
Foreign brokerage firms are also allowed to operate at the BSE, which currently has a market capitalization of US$7.6 billion, with 44 listed companies, 28 mutual funds and 11 bonds, including the US$250 million Ijara sukuk issue.
 
Bahrain Stock Exchange
Contact: Mr. Ali Thamer
Tel: (973) 547909
E-mail: ali@bma.gov.bh

© Press Release 2003


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