Abu Dhabi: Gulf Finance House (GFH), the Bahrain-based Islamic investment banks, announced on Tuesday that it has signed a memorandum of understanding with Nasdaq Dubai to list its newly intended sukuk of $200 million.
In a statement released on the Dubai Financial Market (DFM), the company said, “GFH plans to use the proceeds from the sukuk to repay current outstanding sukuk of $84 million, and undertake business acquisitions for financial consolidation and project development in Bahrain and Dubai.”
The issuance of the $200 million sukuk is expected to take place in the coming months, with the date being subject to obtaining all regulatory approvals.
Sebastien Henin, head of asset management at The National Investor, commented on the listing saying, “My view is that [GFH] is just testing the water to see the appetite of the market. The market is definitely very favourable for companies to raise money.”
He added, “We have seen recently a lot of companies trying and succeeding in renegotiating some loans, so I’m not surprised to see more and more companies trying to raise money. Yields have reached very low levels in the past month, so it makes a lot of sense for Gulf Finance House to raise money that way.”
As for the outlook once the bank lists its sukuk, Henin said it will depend on the rate at which they will be issued, and when the sukuk will be issued. The price will also be related to international interest rates.
In April 2014, GFH obtained shareholders’ approval for sukuk issuance and debt paying facilities of up to $500 million.
GFH shares, which are listed on the DFM, gained 1.9 per cent on Tuesday to reach Dh0.53. The company also topped the market in terms of volume traded with 241.9 million shares traded that total Dh131 million.
