Qatar Islamic Bank may issue short-term Islamic bonds, or sukuk, from September to address short-term liquidity needs, its chief executive officer said yesterday.
The tenor of the sukuk could range between six months and one year, Salah Jaidah said, without giving more details.
"Until September, we don't think we need to go to the market," Jaidah, who heads the Gulf's third-largest Islamic lender by market value, said in an interview.
The global credit crunch and the economic slowdown in key Islamic financial centres such as Malaysia are putting pressure on the $1 trillion (Dh3.67trn) Islamic bond industry, its biggest test since it began 30 years ago.
The bank is eyeing acquisitions in the Gulf and plans to launch a $1 billion fund in 2009 to tap appetite for Islamic products, he said.
Demand for Islamic financing is expected to pick up in Qatar and Qatar Gas Transport Company (Nakilat), the world's largest shipper of liquefied natural gas, is planning to raise $1bn in loans. Qatar Islamic wants to take part in the Islamic tranche to be raised by Nakilat, which could be about 25 per cent of the total, Jaidah said.
Such transactions could help compensate for an expected drop in income from non-core operations – like earnings from its real estate portfolio and foreign currency positions – in 2009 compared with 2008, Jaidah said.
Qatari banks are expected to maintain profitability in 2009 following government measures to shore up liquidity, including buying stakes in listed banks through a capital increase and purchasing the banks' local equity investment portfolios.
Qatar Islamic sold a five per cent stake to the country's sovereign wealth fund, the Qatar Investment Authority, in January and plans to sell another five per cent stake in December, Jaidah said.
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