The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
CAPITAL MARKETS

Kuwait: Investment Dar leans on sukuk

Islamic investment and finance company Investment Dar will increasingly look to the sukuk market to meet its funding needs, according to its chairman and managing director, Adnan Al-Musallam, because of limited opportunities for bank finance in Kuwait.

Investment Dar recently issued a $150 million musharaka sukuk backed by car and real estate loan receivables. “The total equity of banks in Kuwait is $10 billion, which means that we are limited to $1.5 billion from this source,” says Al-Musallam. He also believes that sukuks are cheaper than loans, despite the region’s banks being flush with liquidity.

Use of Shariah-compliant products can further benefit an issuer. “If two-thirds of a company’s financing is done in a shariah-compliant way, it is considered halal, which will boost the share price,” says Amr Abou El-Seoud, Investment Dar’s senior vice-president.

While the company is looking to Islamic finance for future funding, traditional problems remain unresolved. Lead arrangers WestLB and Unicorn Investment Bank took the sukuk far afield in a lengthy roadshow.

This yielded an investor base of 18 banks and institutional investors. Of these, one, the Landesbank Rheinland-Pfalz is German, while another, Bank Muamalat, is Malaysian. The remainder, though, are Middle Eastern, somewhat limiting the success of the sukuk in making “use of more international financing, and widening the investor base,” says WestLB’s David Testa, executive director of asset securitization.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree