Jor­dan is­sues lo­cal cur­rency sukuk in boon for banks

Kuwait Times - - BUSINESS -

DUBAI: Jor­dan’s gov­ern­ment has raised 34 mil­lion di­nars ($47.9 mil­lion) in its first is­sue of a lo­cal cur­rency sukuk for its own fund­ing pur­poses, a deal that will ben­e­fit the coun­try’s Is­lamic banks, the gov­ern­ment said yes­ter­day. The Is­lamic bonds, which use a com­mon sale and lease-back for­mat known as ijara, have a tenor of five years and an ex­pected profit rate of 3.01 per­cent.

Jor­da­nian finance min­is­ter Omar Mal­has said the is­sue, which was more than three times sub­scribed, priced in­side the coun­try’s con­ven­tional bond curve - a sign of strong de­mand.

“The sov­er­eign is­suance is of great sig­nif­i­cance for the king­dom’s four fullfledged Is­lamic banks, be­cause it will give them a badly needed tool to man­age their ex­cess liq­uid­ity, es­ti­mated to be 1.4 bil­lion di­nars,” he said in a state­ment. The is­sue was con­ducted with help from the Is­lamic Cor­po­ra­tion for the De­vel­op­ment of the Pri­vate Sec­tor, an af­fil­i­ate of the Jeddah-based Is­lamic De­vel­op­ment Bank, which said Jor­dan would now be able to con­duct more sukuk sales on its own us­ing the same doc­u­men­ta­tion.

Jor­dan has a small but grow­ing Is­lamic finance in­dus­try. In 2011, the lo­cal com­pany Al-Ra­jhi Ce­ment is­sued 85 mil­lion di­nars of seven-year sukuk, the first Is­lamic bonds in the coun­try. In May this year, the cen­tral bank said it had auc­tioned its first sukuk, a five-year, 75 mil­lion di­nar deal to help finance pur­chases by state util­ity firm Na­tional Elec­tric Power Com­pany. —Reuters


FLO­R­ANGE: Work­ers - mem­bers of French trade union CGT (Con­fed­er­a­tion gen­erale du tra­vail - Gen­eral Con­fed­er­a­tion of Labour) stand dur­ing a de­mon­stra­tion yes­ter­day out­side the ArcelorMit­tal steel fac­tory in Flo­r­ange, east­ern France.

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