By Bernardo Vizcaino
DUBAI, Nov 3 (Reuters) - The Islamic Development Bank (IDB) will set up a $10 billion sukuk issuance programme onthe Nasdaq Dubai exchange, a boost to Dubai's efforts to becomea top centre for Islamic finance in competition with othercities.
It would be the Jeddah-based IDB's third sukuk programme -it already issues Islamic bonds in London and Kuala Lumpur - andits first in a Middle Eastern country. The international lender,which has 56 member countries, promotes economic development inMuslim countries and communities.
In January, Dubai launched a drive to become a centre forIslamic business; its exchanges have so far listed $12.5 billionof sukuk and the total is expected to reach $16 billion by year-end, a statement from the office of Dubai's ruler said late onSaturday.
No time frame was given for the launch of the IDB'sprogramme. Its sukuk are highly sought after by Islamicinvestors because of their AAA credit rating, so they couldoffer a much-needed boost to trading volumes in Dubai andencourage more issuers from outside the emirate to choose Dubaias their listing venue.
"As the IDB plans a significant expansion of its activities,Dubai's world class exchange and regulatory architecturetogether with its commitment to providing Islamic financesolutions of the highest quality make it a natural home for oursecurities," IDB president Ahmad Mohamed Ali was quoted assaying in the statement.
The IDB also plans to expand its sukuk programme on theLondon Stock Exchange this month to $10 billion from thecurrent $6.5 billion. It has issued 15 sukuk in London since2005.
In addition, the IDB has a 1 billion ringgit ($313 million)programme listed on Bursa Malaysia, which has raised atotal of 700 million ringgit via three sukuk since 2008.
Dubai's announcement comes days after Britain unveiled plansto issue a 200 million pound ($320 million) sovereign sukuk, thefirst from a Western country, ramping up efforts to promoteitself as an Islamic finance hub.
Prime Minister David Cameron announced the intention duringthe World Islamic Economic Forum, a major conference for theindustry, in London last week; the event will be held in Dubainext year.
- Islamic Development Bank
- Nasdaq Dubai