• Home
• /
• Business

Dubai may issue $1.5b sukuk in Malaysian market

KUALA LUPUR/DUBAI — Dubai plans to issue about $1.5 billion in sovereign sukuk in Malaysia as the Gulf Arab emirate looks to tap the world’s largest Islamic bond market to diversify its funding avenues, people with direct knowledge of the deal said on Wednesday.

---

---

Work on the $1.5 billion multi-currency programme was “more than 50 per cent” under way, but the plan was not final given the volatility in financial markets due to Ireland’s debt troubles and tensions on the Korean peninsula, said one source not authorised to speak to the media.

“This will be the first foreign sovereign to issue ringgit (sukuk) in Malaysia,” said the source who asked not to be identified as the plan has not been announced.“The Malaysian market provides cheap liquidity, interest rates are still attractive and the swap rates are also still attractive.”

Dubai’s finance chief said the government was meeting investors in Malaysia to explore opportunities for a potential bond issue.

“This trip is a part of our plan to meet investors and explore opportunities,” Abdulrahman Al Saleh, director general of the Dubai Department of Finance, told Reuters when asked to confirm news that Dubai was aiming to issue about $1.5 billion in multi-currency Islamic bonds in Malaysia. “We have not covered Malaysia in the previous visits.”

Another source said the total issuance size had not been been determined.

“Tapping into a new investor base is important for Dubai, having gone through the global financial crisis,” the source added. “Putting its name to various investor bases may make sense to the government.” —