SINGAPORE - More Singapore companies are keen to raise Islamic financing after a landmark sharia REIT and local currency sukuk from Malaysia's Khazanah Nasional stirred the city-state's interest in wholesale Islamic banking, OCBC Al-Amin said on Thursday. (source)
Companies are exploring sukuk and Islamic private equity deals as an avenue to reach a broader class of investors, including those who can only put their money in assets that comply with religious principles, OCBC Al-Amin's chief executive said.
These include Middle Eastern investors and government funds that invest according to Islamic tenets, such as Malaysia's Pilgrims Fund, Syed Abdull Aziz Syed Kechik said.
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OCBC Al-Amin, which is a subsidiary of OCBC's Malaysian unit, is working on Singapore dollar Islamic financing deals, he said, but declined to give details.
Malaysian state investor Khazanah sold S$1.5 billion in Islamic bonds last August, Singapore's largest sukuk sale, in a transaction which drew a demand of 4.3 times book size.
Sabana REIT , the world's largest sharia-compliant property trust, sold 508 million units at S$1.05 each in its IPO in November. The IPO was 2.5-times subscribed.
More sharia banking deals could mark a step forward for the $1 trillion Islamic finance industry in Singapore, which has seen lukewarm interest despite regulatory and tax measures.
Issuers from Singapore accounted for $74.4 million or 0.5 percent of total global Islamic bond sales of $14 billion last year, Thomson Reuters data showed.
In 2009, Singapore's central bank announced regulatory and tax measures to boost Islamic banking including allowing Singapore dollar Islamic bonds to have equal tax, regulatory and liquidity treatment as Singapore government bonds.
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