Islamic finance body says first sukuk to debut within months
By Al-Zaquan Amer Hamzah
KUALA LUMPUR (Reuters) - International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said.
Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments.
Issuance of the first sukuk has been delayed. IILM has faced a big challenge to ensure it complies with laws in all of the 12 countries in which its members are, Chief Executive Officer Mahmoud AbuShamma told Reuters in an interview late Tuesday.
"It does not require an extreme amount of effort, but we're setting up a product that is ever-expanding and has many complexities," said AbuShamma, a former HSBC executive who launched Indonesia's first Islamic banking unit operated by a foreign bank.
He said that IILM is 85 percent prepared for the first issuance, and what remains to be worked out are "some highly technical issues."
"It's not our mandate to issue one sukuk and go off on a holiday, we should be manufacturing a continuous supply of it," he added.
Eventually, IILM will issue sukuk totaling more than $2 billion a year, AbuShamma predicted.
IILM members include monetary authorities in Indonesia, Iran, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Saudi Arabia, Sudan, Turkey and the United Arab Emirates as well as the Islamic Development Bank ISDBA.UL and the Islamic Corporation for the Development of the Private Sector. Continued...