Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 57 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Tamweel bond climbs to record on Dubai recovery: Islamic Finance
June 28, 2012
 Print    Send to Friend

DUBAI: Tamweel’s Islamic bond climbed to a record as the mortgage provider controlled by Dubai Islamic Bank plans its second sukuk sale this year, boosted by an increase in property sales.

The yield on the 5.154 per cent Islamic bonds, which pay returns on assets instead of interest, due January 2017 has fallen 57 basis points in June to 4.30 per cent on Wednesday.

That compares with a 28 basis-point drop in the average yield on corporate sukuk to 4.11 per cent yesterday, the HSBC/Nasdaq Dubai GCC Corporate US dollar Sukuk Index shows.

The lender, which posted a loss in 2009, plans to raise $235 million this week, two investors familiar with deal said.

“Dubai is doing well, property sales are up, people are paying their mortgages and that is correcting all the problems Tamweel had with its profits,” Aliasgar Tambawala, a fixed- income investment manager at Dubai-based Mashreq Capital DIFC, said.

“The fact that the sukuk are guaranteed by Dubai Islamic Bank gives sukukholders comfort that it’ll be repaid.”

Dubai’s fourth-quarter home sales jumped 67 per cent from a year earlier to Dhs2.85 billion ($776 million), according to the emirate’s Land Department.

Tamweel’s mortgage transactions rose 10 per cent to 15 per cent during the first quarter as prices started to recover, acting Chief Executive Officer Varun Sood said April 16.

Tamweel plans to sell security-backed sukuk at about 335 basis points to 345 basis points over the one-month London Interbank Offered Rate, the investors said yesterday, asking not to be identified because details haven’t been made public. The collateral will be leases backed by residential properties in Dubai, they said.

The company, rated the lowest investment grade of Baa3 by Moody’s Investors Service, raised $300 million from an Islamic bond sale in January. Sood didn’t respond to questions sent via e-mail yesterday afternoon and wasn’t able to answer by telephone.

Economic growth in Dubai will quicken to as much as 5 per cent in 2012 from about 3 per cent last year, the government said in February.

Tamweel and Amlak provided almost 90 per cent of all mortgages in the UAE. Tamweel stopped providing mortgages in October 2008 after the global credit crisis however, the company resumed lending after Dubai Islamic Bank, the nation’s biggest Shariah-compliant bank, raised its stake in September 2010 to 58 per cent to help support the mortgage market.

Bloomberg

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
Related Stories
DGCX launches two new pairs of INR futures
Dubai: Further building on the success of its Indian product suite, the Dubai Gold and Commodities Exchange (DGCX) on Wednesday announced the launch of two new pairs of M..
UAE e-Commerce industry to hit $10 billion
DUBAI: Technology has played a significant part in supporting UAE’s economic growth. Latest data suggests that the e-Commerce industry in the UAE alone will stand at $10 ..
NRIs eyeing investments through IREIS
Abu Dhabi: Kerala’s ambitious information technology business township project Smart City Kochi (SCK), has received environmental clearance for the entire project coverin..
DED and Tecom Investments sign deal
Dubai: The Department of Economic Development (DED) in Dubai and Tecom Investments’ Dubai Design District (d3) have signed a Memorandum of Understanding (MoU) to establis..
UAE’s bakery chain gets fresh brand identity
Dubai: UAE’s leading bakery chain, Al Jadeed Bakery has revealed its new logo during a glittering ceremony in Dubai on Wednesday. “We are delighted to witness yet anot..
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright