KUALA LUMPUR, July 21 An Abu Dhabi government
department and Bahrain's Gulf International Bank are planning
ringgit-denominated sukuk issues in Malaysia, as Middle Eastern
issuers seek to diversify their funding options, sources said on
Gulf International Bank, a conventional wholesale bank, has
begun work on a ringgit sukuk programme which would allow it to
raise at least $1 billion, sources said.
Abu Dhabi's transport department is considering a ringgit
Islamic funding programme in the Southeast Asian country but has
yet to mandate any banks for the deal, the sources said.
"Quite a number of Middle East issuers are looking at the
Malaysian market," said one of the sources who declined to be
identified because the deals have not been announced.
Officials from Gulf International Bank and Abu Dhabi's
transport department were not immediately available for comment.
As a conventional lender, Gulf International Bank would be
required to fulfill regulations in Malaysia which require sukuk
issuers to use the proceeds for sharia-compliant purposes, the
Several Middle Eastern issuers have tapped Malaysia's sukuk
market, the world's largest, in the past year.
In February, Kuwait-based Gulf Investment Corporation (GIC)
sold 600 million ringgit ($200 million) of five-year Islamic
bonds in Malaysia at a yield of 5.25 percent.
National Bank of Abu Dhabi (NBAD), the UAE's
largest lender by market value, launched a 10-year 500 million
ringgit Islamic bond in December, its second ringgit bond during
Sources have also said Dubai plans to issue about $1.5
billion in sovereign sukuk in Malaysia.
Bankers expect Islamic bond issuance to pick up in the
second half, with Gulf issuers returning to the market after
political uprisings in the region had virtually halted the bond
Recent sukuk issues that have been oversubscribed include
the $2 billion sovereign issue from Malaysia, HSBC
Middle East's $500 million sale in May, and Sharjah Islamic
Bank's $400 million issue.
($1 = 2.998 Malaysian Ringgit)
(Reporting by Liau Y-Sing; Additional reporting by Shaheen
Pasha in Dubai and Stanley Carvalho in Abu Dhabi; Editing by