Kuwait: Investment Dar leans on sukuk
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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.

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