DUBAI — The Jeddah-based Islamic Development Bank (IDB) is considering setting up an Islamic bond issuance program in Dubai, in what would be a boost to the emirate's ambitions to become a global center for Islamic business. It would be only the third such program from the AAA-rated IDB, an international institution which has 56 member countries and promotes economic development in Muslim countries and communities. It would be the IDB's first sukuk program in a Middle Eastern country. While discussions are at an early stage, the IDB has seen growing demand for its sukuk and already plans to expand its main London-listed program to $10 billion from the current $6.5 billion. “The size has not yet been estimated and it may take time,” Hasan Demirhan, director at the IDB's treasury department, said of the possible Dubai program. “The format will be similar to the existing MTN (Medium Term Note) format subject to the prevailing regulatory requirements.” In 2005, the IDB set up its maiden program on the London Stock Exchange. It has raised close to $7 billion from 15 sukuk there, out of which $6.3 billion are currently outstanding. It also has a 1 billion ringgit ($313 million) program listed on Bursa Malaysia, which has raised a total of 700 million ringgit via three sukuk since 2008. In January Dubai announced plans to become a global center for Islamic business, and authorities last week outlined a broad strategy to help accomplish this, including developing the emirate as a centre for issuance and trading of sukuk. London and Kuala Lumpur are currently the big global centers for sukuk, which are structured to obey Islamic principles such as a ban on interest payments. — Reuters
