Islamic mortgage companies embracing sukuk

Fri, 13 Jan 2012
Islamic mortgage providers appear to be increasingly embracing sukuk, or Islamic bonds.

Tamweel, a Dubai-based Islamic mortgage company, has announced a five-year $300 million (£196 million) sukuk, while the General Authority of Civil Aviation in Saudi Arabia also revealed it plans on making use of the method in order to fund the construction of a new terminal at Jeddah airport, the Wall Street Journal reports.

In addition, Emirates Islamic Bank in Dubai - which was launched in 2004 - has issued a $500 million, five-year Islamic bond, while First Gulf Bank has sold another $500 million sukuk.

And it appears investors are keen not to miss out on opportunities presented through this method, with head of global markets for Middle East and North Africa at HSBC Georges Elhedery stating: "Our message is: guys, do it, the window is good. It is as good an environment we can get given the global environment, given the eurozone environment."

The greater focus on the Islamic finance market appears to have been aided by tighter funding in Europe driving issuers in the Middle East to look for new funding options.
Salaam-u-Allaikum
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