Monday, June 15, 2009

Kuwait Finance House unveils investment arm

By Sumathi Wong
Kuwait Finance House (Malaysia) Bhd yesterday unveiled its sister company, Liquidity Management House for Investment KSCC (Liquidity House) which aims to penetrate further into the Malaysian market.
Chairman and managing director of Liquidity Management House, Emad Al Monayea said that it currently has very strong communication relations with its sister companies, among which is Kuwait Finance House (Malaysia).
"I don't think there is a need to have a separate set up currently, but definitely within the medium term strategy. We cannot avoid having a physical business jointly with KFH Malaysia to have our own presence within the Malaysian market," said Emad.
Liquidity Management House is the investment company wholly-owned by Kuwait Finance House KSC and currently serves as its international investment arm. Currently based in Kuwait, it started operations in Sept 2008 with a capital of Kuwaiti Dinar of 100 million (RM1.22 billion) and is regulated by the Central Bank of Kuwait.
Its main objective is to be a principal player in the international sukuk market and the Shariah-compliant structured finance arena.
Together with Kuwait Finance House (M), it is also keen to capitalise on the opportunities that can be derived from the advanced and sophisticated local sukuk market, whereby investors from the Middle East and Gulf Cooperative Council countries could take advantage.
Emad also added that there would be more sukuk issuance this year compared to last year but not equaling the total sukuk issuance in 2007, where last year's total sukuk issuance was US$14 billion (RM49.4 billion).
He noted that it would issue sukuks of US$300 million to US$400 million in total and not limited to any country.
"There is a healthy appetite for it with a focus on solid corporates with proven track record, strong cash flow derived from operations and maintaining realistic assets to back up the structure that we develop," said Emad at the launch of the Liquidity House in Kuala Lumpur yesterday [June 9, 2009].
Meanwhile, Kuwait Finance House (M) deputy CEO Ab Jabar Ab Rahman views Liquidity House as an extension of the bank's corporate and investment banking division.
"With the complemetary efforts of Liquidity House, the KFH group is in an even stronger position to play a key role in the development of Islamic banking in Malaysia and the region."
Kuwait Finance House (M) has participated with Liquidity House recently in the syndicated Ijarah facility for Burgan Company for well drilling trading and maintenance for the purchase of four new oil rigs.

(This story appeared in The Malaysian Reserve on June 10, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)

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