Opportune time for borrowers to issue Sukuk, says BLME

Following on from S&Ps comments regarding strong demand for Sukuk and low yields; credit spreads have been tightening in the Sukuk space for quite some time, due to supply outstripping demand and strong fundamentals in the Middle East. In addition, with the recent geopolitical tensions in Ukraine and other emerging markets, a flight to credit quality has led to further tightening. The news of Dubai rolling over its debt owed to Abu Dhabi and the UAE Central Bank for 5yrs at 1% has lowered yields further. With yields at such low levels it seems an opportune time for borrowers to issue Sukuk, even for existing conventional issuers.

BLME acts as co-lead manager on Islamic Development Bank Sukuk issuance

BLME, Europe's largest Islamic bank, has been selected to co-lead the Islamic Development Bank (IDB) US$1.5 billion five-year Sukuk. The bank's representative office in Dubai was appointed in to handle the issuance. DB Sukuk is the largest ever Islamic bond issued from the AAA rated supranational lender in 2014. It is also the largest Sukuk issuance BLME has been appointed to act as co-lead manager on to date. The IDB issued 16 Sukuk in London since 2005 which raised around US$7 billion. It has a US$ 313 million programme listed in Malaysia and has raised 700 million ringgit since 2008 via three Sukuk. BLME listed on NASDAQ Dubai in October 2013, and announced a strong performance for the full year on 3rdMarch 2014.

BLME returns to healthy profits

First it was the shareholders of Islamic Bank of Britain (IBB) at their general meeting in August 2010 approving a 20 million pounds capital injection from founding shareholder Qatar International Islamic Bank (QIIB). This was an effective bailout of IBB which gives the UK's only dedicated Islamic commercial bank some much-needed breathing space.
BLME, the wholesale Islamic bank which claims to be the largest Islamic bank in Europe, was the first of the five Islamic banks in the UK to report "a healthy return to profitability" for the first half of 2010.
One area in which BLME is setting the pace is Islamic trade finance and structured trade finance. According to Massoud Janekeh, director of Islamic Capital Markets at BLME trade finance should be a natural home for Islamic finance funded either through a Murabaha sale or a Tawarruq structure.

BLME plans Shariah-compliant fund

Bank of London and the Middle East (BLME), the totally-Shariah based bank, is currently working on the development of a Shariah-compliant Absolute Return Fund. The bank, which has its own Shariah Supervisory Board (SSB), has been doing quite well since opening just three years ago and has been providing Islamic investment and finance services to the 15 million Muslim population in Western Europe, as well as customers in Turkey. Nigel Denison, director and head of asset management, explained that the bank's customer base includes people of all faiths who want a trustworthy place to bank. The bank currently has predominantly Kuwaiti shareholders and would someday like to build a presence in the Kingdom.

BLME forced to delay fund launches

Bank of London and the Middle East (BLME), has delayed one global equity tracker and one emerging markets equities fund as the financial crisis constrains clients in the Middle East according to the CEO, reported Cecilia Valente and Daryl Loo on Reuters. One fund which has been delayed but is now poised to launch later this year with $70 million will aim to exploit a niche market for office space for doctors in the United States. BLME has also raised GBP 50 mn from an institutional investor for a UK property fund and plans to raise GBP 20 mn by June for a pooled UK property fund.

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