Ahmed Abbas

Sukuk-backed Sukuk test industry's appetite for complexity

Some firms are starting to combine sukuk, using portfolios of long-term issues to back short-term certificates. This lets them create liquidity programmes that address the persistent shortage of money market instruments needed by Islamic banks to manage their short-term funds. Such is the approach used by Bahrain-based Liquidity Management Centre (LMC). The programme is uses an SPV (special purpose vehicle) where all the sukuk are booked. The SPV is fully backed by sukuk of different tenors and rates. A similar format is to be used by the Malaysia-based International Islamic Liquidity Management Corp (IILM), where all of the assets will be either sovereign, sovereign-linked or supranational assets. If these programmes gain traction they could open the door to additional layers of securitisation.

Liquidity Management Centre (LMC) announces a net profit of USD 1.43 million for the period ended 31st March 2013

Liquidity Management Centre (LCM) has announced its results for the first quarter ended 31st March 2013. The insitution recorded a net profit of USD 1.427 million compared to a net profit of USD 0.511 million for the same period of the year 2012 resulting in a 179.25% increase in the net profit. The average interbank rate remains below 0.5%. Moreover, the total operating income recorded an amount of USD 3.181 million in comparison to USD 1.958 million for the same period in 2012. The positive results were due to various advisory services provided for transactions for Islamic Banks and corporations in the region and a portfolio of Sukuk and equities with a diversified investment approach. The Bank's balance sheet witnessed significant improvement in quality and liquidity. Furthermore, the Shareholders' equity increased by 2.7% during the same period.

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