Dubai’s proposed sale of as much as $1.5 billion of Islamic bonds in Malaysia won’t appeal to most local funds unless the emirate obtains a rating, Mashreq Capital DIFC Ltd. and Nomura Asset Management Malaysia Sdn Bhd. said.
The government hired CIMB Investment Bank Bhd., a Kuala Lumpur-based unit of CIMB Group Holdings Bhd., the world’s top sukuk arranger this year, as a lead manager to sell between $1 billion and $1.5 billion of the securities, a person with knowledge of the plan said Nov. 24. Malaysian Prime Minister Najib Razak said Oct. 26 the Dubai Department of Finance is proposing a multi-currency sukuk program.
“I doubt they can get it done in any sort of size without a rating,” Abdul Kadir Hussain, who manages $2 billion of mainly Persian Gulf assets as chief executive officer of Mashreq Capital in Dubai, said in a response to e-mailed questions Nov. 25. “Normally Malaysian investors are relatively conservative and invest in very high grade type issuers.”
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