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Friday April 20, 2012
KUALA LUMPUR: Al Rajhi Bank Malaysia, a unit of the world's biggest Islamic bank, may sell its first ringgit-denominated syariah-compliant bonds to fund expansion, a company official said.
“We have a committee that evaluates all funding options and definitely, I would say sukuk is a serious option,” Mudassir Amray, Al Rajhi Bank Malaysia's head of wholesale banking in Kuala Lumpur, said in an interview yesterday. “If we issue the sukuk, it will be the first for Al Rajhi Group. And yes, it will be a benchmark size offering.”
A benchmark offering is typically around $500 million, with Amray declining to be more specific on the size of the sukuk, or bonds that pay returns on assets to comply with Islam's ban on interest. Jeddah-based Al Rajhi Bank, Saudi Arabia's biggest publicly traded lender, was given a license to operate an Islamic bank in the Southeast Asian nation in 2006.
Sales of ringgit-denominated Islamic bonds in Malaysia totalled RM10.5bil this year, compared with RM9.8bil in the same period in 2011, according to data compiled by Bloomberg. The Bloomberg-AIBIM-Bursa Malaysia Sovereign Syariah Index of the most-traded government debt was little changed at 107.33 yesterday, taking gains this year to 1.6%. - Bloomberg
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