Qatar lists $700m Sukuk on Labuan exchange

DUBAI - In a move that signals an Arab shift away from US and European to South East Asian financial markets, the Qatar Government has issued a $700 million Sukuk or Islamic Trust Certificate Listing, on the Labuan International Financial Exchange (LFX).

By A Staff Reporter

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Published: Fri 27 Feb 2004, 12:45 PM

Last updated: Wed 1 Apr 2015, 11:56 PM

The Qatar Global Sukuk has an A+ Standard & Poors rating, was endorsed by the Bahrain-based International Islamic Financial Market (IIFM) in September 2003 and was heavily oversubscribed. The Qatar Sukuk has raised LFX capitalisation to $2.95 billion.

"The dramatic success of the Qatar Global Sukuk indicates the confidence foreign investors have in Middle Eastern credit," said Badlisyah Abdul Ghani, head of the Islamic division of CIMB (L) Ltd., which was appointed as listing sponsor for the Qatar Global Sukuk.

CIMB (L) Ltd. is a wholly owned subsidiary of Commercial International Merchants Bankers Berhad (CIMB), one of Malaysia's leading financial institutions, which recently received Euromoney's Islamic Finance Award for Best Domestic Market Sukuk House, reflecting CIMB's expertise in Islamic finance.

According to Badlisyah, this could be the beginning of a trend among Arab and Muslim investors away from traditional western financial markets toward South East Asian markets.

"There are several contributing factors including a reaction to current US administration policies toward Arab states as well as in some European Union countries. The fact that a major South East Asian market like the Labuan International Financial Exchange has the ability to give sophisticated investors good quality paper has provided a strong alternative to western markets.

"We hope that Qatar's Sukuk listing will encourage other Middle Eastern institutions like the Islamic Development Bank and the Bahrain government to list their global Sukuk on LFX. This will greatly enhance the development of the global Islamic capital market."

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