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DIB investment banking arm arranges more than AED 20 billion in sukuk and syndication transactions in first half of 2008

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Points of Essence:

  • Dubai Islamic Bank has arranged in excess of AED 20 billion of sukuk and syndication transactions
  • DIB acted as lead manager, arranger and book runner on over 90 per cent of all sukuk transactions as well as over 60 per cent of Islamic syndication transactions
  • DIB had pioneered various sukuk in the region such as sukuk with equity warrants, convertible sukuk, musharaka sukuk, sukuk under the EMTN program and dirham-denominated sukuk.

Dubai, June 24, 2008: Dubai Islamic Bank’s (DIB) wholly-owned investment banking arm, Millennium Capital Limited, announced today that it has arranged in excess of AED 20 billion of sukuk and syndication transactions since the beginning of this year. DIB has risen to second place in the GCC Islamic Bonds League Tables, up from sixth place in 2007, according to the Bloomberg Underwriter Rankings published in June 2008.

The largest GCC-based banks such as DIB, the world’s first Islamic bank, have seen increasing competition from the leading global investment banking firms for a share in this fast-growing Sharia-compliant market space. Despite the stiff competition, DIB has successfully managed to further strengthen its leadership position in this sector.

Khaled Kamda, Group Managing Director & CEO, Dubai Islamic Bank, said: “UAE issuers such as DIB, continue to receive a strong response from the markets. Since the successful AED 7.5 billion closure of the first rated sukuk for the Jebel Ali Free Zone in Dubai in November 2007, DIB has continued to play the lead role in channeling the vast liquidity of the region into the sukuk and syndication market. This channeling has improved asset allocation and provided scale and depth to the domestic capital markets in a very meaningful way.”

Since the beginning of the year, within the UAE, DIB has acted as lead manager, arranger and book runner on over 90 per cent of all sukuk transactions within the market, as well as over 60 per cent of Islamic syndication transactions.

“In addition, DIB is currently executing several significant transactions and expects to successfully conclude these transactions shortly,” said Saad Zaman, Deputy CEO of Millennium Capital Limited. “The success of DIB’s investment banking business is predicated on strong origination, structuring and a distribution track record that has served it well in deepening its already close customer relationships.”

DIB has had many firsts in the sukuk industry, such as the first sukuk with equity warrants, the first convertible sukuk, the first musharaka sukuk, the first sukuk under the EMTN program and the first dirham-denominated sukuk.

The overall suite of investment banking products continues to see strong demand from DIB’s client base, according to Zaman. Increases in outbound cross-border activity have provided DIB with significant business opportunities, focusing in areas such as infrastructure, financial services and real estate. Building on its asset management platform and the success of its asset-backed funds, DIB plans to continue rolling out new funds. The Sharia-compliant funds are based in several regions and cover several asset classes, including aviation, shipping and real estate.

Private equity is another area where DIB is keen to expand and create new successes within its investment banking platform. Recently, DIB and Millennium Capital partnered with Global Investment House of Kuwait to launch a US$ 500 million Islamic buyout fund.

Zaman concluded: “This is the first of an expected series of future private equity funds that will target different asset types and regions to provide investors with a wide range of private equity investment options.”

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Written by Suapi Shaffaii

June 25, 2008 at 7:50 am

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