Tuesday, Oct 11, 2011
Gulf News
Abu Dhabi: Mashreq Al Islami, the Islamic finance company belonging to the Mashreq group, said yesterday that the company is in talks with three entities, including corporates and government related entities, to establish sukuk programmes.
There is enough liquidity in the market. It is time the sovereigns, GREs and corporate entities tapped this liquidity. We are pushing to establish a local currency-denominated sukuk market. Currently we are talking to three entities who have the potential for bench-mark sized ($500 million and up) sukuk issuance, Moin Al Deen Malim, Chief Executive of Mashreq Al Islami, told Gulf News.
According to Central Bank data the UAE has more than Dh1 trillion in bank deposits. Experts say an active sukuk market would attract these funds into the bond market.
Sovereign issue
The sukuk issuance in the region is denominated in the dollar. It is high time local currency-denominated issuance is made available to the market. To create a market benchmark the initiative has to come from sovereign issues, said Malim.
Experts said creation of a sovereign benchmark and yield curve is very important in appropriately pricing sukuk issues in the local and regional markets.
If corporates are willing to pay the price based on market benchmarking, I dont think there should be any problem in finding long-term funding, he said.
By Babu Das Augustine, Deputy Business Editor
Gulf News 2011. All rights reserved.
