Qatar Islamic Bank may issue short term sukuks
Doha, April 19, 2009
Qatar Islamic Bank may issue short term Islamic bonds, or sukuks, from September to address short-term liquidity needs, its chief executive officer told Reuters.
The tenor of the sukuks could range between six months to one year, Salah Jaidah said, without giving more details.
"Until September, we don't think we need to go to the market," Jaidah, who heads the Gulf region's third-largest Islamic lender by market value, said in an interview.
The global credit crunch and the economic slowdown in key Islamic financial centres such as Malaysia are putting pressure on the $1 trillion Islamic bond industry, its biggest test since it began 30 years ago.
The bank is eyeing acquisitions in the Gulf Arab region and plans to launch a $1 billion fund in 2009 to tap appetite for Islamic products, he said.
Demand for Islamic financing is expected to pick up in Qatar and Qatar Gas Transport Co (Nakilat), the world's largest shipper of liquefied natural gas, is planning to raise $1 billion in loans.
Qatar Islamic wants to take part in the Islamic tranche to be raised by Nakilat, which could be about 25 percent of the total, Jaidah said.
Such transactions could help compensate for an expected drop in income from non-core operations -- like earnings from its real estate portfolio and foreign currency positions -- in 2009 compared with 2008, Jaidah said.
Qatari banks are expected to maintain profitability in 2009 after the government implemented a slew of measures to shore up their liquidity, including buying stakes in listed banks through a capital increase and purchasing the bank's local equity investment portfolios.
Qatar Islamic sold a 5 percent stake to the country's sovereign wealth fund, the Qatar Investment Authority, in January and plans to sell another 5 percent stake in December, Jaidah said. - Reuters