Deutsche Bank to bring major sukuk to ME market

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Deutsche Bank expects to bring to the market a "major" Islamic bond in Saudi Arabia by the end of the first quarter, as part of a wider push into the world's largest oil exporter, a company executive said on Tuesday.

Hussein A Hassan, head of structuring, Middle East and North Africa told the Reuters Islamic Banking & Finance Summit that the sukuk will be greater than the benchmark size of $500 million. He declined to identify the sector.

He added that this mandate comes even as the industry struggles from a slowdown in issuances in the Gulf.

Hassan said: "The beginning of this year has not been encouraging," adding that issuances should be "at par or slightly lower than 2009."

Despite the industry's difficulties, Deutsche Bank continues to see interest in issuances by sovereign and quasi sovereign entities, with a number of mandates coming out of Saudi Arabia.

He added that Deutsche Bank has less than 10 but more than five mandates in the pipeline, with many of them coming from Saudi Arabia. Hassan said that he expects Saudi Arabia to play a larger role in this area in the future.

And Deutsche Bank's relationship with Saudi Arabia will continue to grow in 2010 as the company plans to launch a sharia compliant mortgage product to tap increasing demand for housing in Saudi Arabia.

Saudi Arabia's population has risen to over 25 million, according to government estimates, posing a challenge to the government in terms of providing jobs and housing.

Annual housing demand may hit 160,000 new units each year with up to 50,000 units in unmet demand, according to Egyptian investment bank EFG Hermes.

Hassan said Deutsche Bank will focus on the residential, rather than commercial, real estate market in Saudi Arabia.

There has been increasing interest in the mortgage industry within Saudi Arabia ahead of a much-anticipated Saudi mortgage law, expected to pass this year.

Observers expect the law to usher in a new boom period for mortgage financing in the kingdom - an area traditionally avoided by financial institutions due to a lack of proper regulations.

Hassan, however, said the company was not planning to wait for the law for it to enter the market.

He said: "We are going to start on the basis of the current law and shift to the new law when it passes."

Hassan added that the company is looking to start in Saudi Arabia and expand in the real estate lending market in the future. (Reuters)

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Dubai mulls rule change to lure more domiciled funds

Dubai mulls rule change to lure more domiciled funds

Proposed rules would create a new class of funds in the Dubai...

Gulf's rift over Qatar may slow investment, reforms

Gulf's rift over Qatar may slow investment, reforms

Analysts suggest dispute may not hurt immediately but could impact...

Dodgy data obscure reality of Gulf's economic boom

Dodgy data obscure reality of Gulf's economic boom

Economists say that as Gulf opens wider to foreign investment...

Most Discussed
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams