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Monday, 1 December 2014

Pakistan picks banks to hold dollar sukuk roadshows, will start Monday

 Pakistan has mandated four banks to arrange fixed income investor meetings starting Monday ahead of a potential issue of a U.S. dollar-denominated Islamic bond, a document from lead managers said on Sunday.
The sovereign, rated Caa1 by Moody's and B- by Standard & Poor's, has picked Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered to arrange the roadshows and the possible deal, it showed.
Pakistan will hold roadshows in the United Arab Emirates on Monday, before heading to London and Singapore on Tuesday, with a 144A-compliant, benchmark-sized sukuk to follow, subject to market conditions, the document added.
Benchmark size is traditionally understood to mean upwards of $500 million. If a debt issue is 144A-compliant, investors in the United States can buy the offering.
The sukuk uses a sharia-compliant sale and lease-back structure to underpin the transaction. Proceeds will be used to purchase land comprising the M-2 Motorway, which connects Lahore to the capital Islamabad.
Political instability in Pakistan had temporarily caused some uncertainty around the sovereign sukuk issue as Prime Minister Nawaz Sharif came under pressure from weeks of demonstrations calling on him to resign.
Pakistan, a favourite with frontier market investors since peaceful elections were held there last year, sold $2 billion of dollar-denominated bonds in April after attracting $7 billion in investor orders.
In September 2013, the IMF saved Pakistan from possible default by agreeing to lend it $6.7 billion over three years.
The sukuk will be issued by Pakistan International Sukuk Company and is expected to be listed in the Luxembourg Stock Exchange.

Pakistan's external debt was about 19 percent of gross domestic product (GDP) on June 30 and it had a fiscal deficit of 5.5 percent of GDP in 2013-2014, it showed.
(Reuters / 23 November 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Pakistan's Asia Insurance to enter takaful market

Lahore-based Asia Insurance Company Ltd will seek shareholder approval next week to offer Islamic insurance (takaful) products, the latest insurer seeking to expand into the sector.
Asia Insurance joins a growing list of firms in offering sharia-compliant products including United Insurance Company and EFU insurance group , the largest private insurance group in the country.
In May, Pakistani regulators introduced new takaful rules that allowed conventional firms to enter the sector, aiming to increase insurance penetration which remains the third-lowest in Asia.
An alternative to conventional insurance, takaful follows religious guidelines including bans on interest and pure monetary speculation and a prohibition on investing in industries such as alcohol and gambling.
Asia Insurance will seek approval to allocate 50 million rupees ($492,853) in capital to its takaful operation, the minimum capitalisation requirement, the firm said in a bourse filing.

It will also seek to increase its authorised capital to 500 million rupees from 300 million currently.
(Reuters / 24 November 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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