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Strong H1 seen for Islamic issuance-Noor Islamic

Bank sees Turkey coming out with more issues in H1.

October 14, 2010 8:37 by



Noor Islamic Bank expects to close a “healthy number” of Islamic syndicated loans and Islamic bonds in the first half of 2011, with Turkey emerging as an active market for Islamic finance, said a senior executive at the bank.

Aamer Zaidi, head of corporate banking at Noor Islamic Bank, said on Wednesday that the company is involved in a few sukuk issuances in the Gulf region and is also working on syndicated loans within the UAE.

While he declined to give details about the deals, he added that announcements could come as early as the first quarter of 2011.

“In the last couple of months, there has been a change in the market with more appetite for the emerging market debt particularly in the Gulf region,” Zaidi said in an interview with Reuters. “We are not at the same levels we were at in 2007 and 2008 but it’s going to be an exciting first half 2011.”

The Gulf sukuk market is poised for a revival as large corporate and supra-national issues come to market following Dubai World’s restructuring accord with 99 percent of its bank lenders as well as Dubai’s successful $1.25 billion conventional bond issue in late September.

TURKEY IN FOCUS

Zaidi said the unlisted bank is particularly excited by the growth prospects of Islamic finance in Turkey and is actively pitching for more deals out of the traditionally secular country.

Noor Islamic closed a $240 million murabaha syndicated loan for Turkey’s Albaraka – a unit of Bahraini Islamic lender Al Baraka last month – as well as a $255 million dual-currency Islamic syndicated facility for Turkey’s Bank Asya in April.

“I am confident that we will see more issues, syndicated and sukuk, coming out of Turkey in the first half of 2011,” he said. “I think we can expect that the size and number will be higher than what’s been done so far.”

Turkey’s first Islamic bond offering – a $100 million sukuk from from lender Kuveyt Turk – closed in August and was oversubscribed by 45 percent, indicating a healthy demand for Turkish Islamic paper.

Islamic finance experts say that Kuveyt Turk’s issuance set a benchmark for future sukuk issuances from banks in the country.

While Noor Islamic was not involved with the transaction, Zaidi said the bank will be “pitching quite aggressively” within Turkey as Islamic finance grows in the country.

Zaidi said the bank began to seek new markets while domestic markets slowed down.

“We are not going to spread ourselves thin,” he said. “We’re looking at specific countries within the GCC and Turkey where we feel we’ve built a certain level of expertise.”

Noor Islamic Bank is 25 percent owned by Dubai Investment Group, the investment arm of Dubai Holding which is owned by the ruler of Dubai.

(Reporting by Shaheen Pasha; Editing by David Cowell)



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