Kingdom Investment

National Bonds (NB), the Dubai-owned financial services firm, is looking for a partner to form a joint venture company to offer sukuk (Islamic bonds) in Saudi Arabia, CEO Mohammed Qasim Al Ali said. Since the SaudiSukuk market is larger than the UAE’s, over AED 150m (USD 40.9m) would need to be invested, more than the minimum capital required for sukukcompanies in the UAE, he said
NB is flexible regarding the stake it would hold in any JV, Al Ali said, adding he is not sure as yet whether the regulations in Saudi Arabia would allow NB to take a majority stake in a JV. “We do not know yet because we have not gone that far into the legalities,” he explained. He was speaking on the sidelines of the Kingdom Investors Summit in Riyadh.
Al Ali said that NB has already initiated talks with some potential partners but would not give any further details. The company is engaged with “someone on the ground” to help locate partners, but on a non-exclusivity base. It would welcome mandates from advisory firms that could link NB to the “right partner,” Al Ali said.
He also commented on a recent statement by the Saudi Minister of Finance, Ibrahim Al-Assaf, who said the Saudi government is seriously considering issuing Sukuk to finance infrastructure projects such as the expansion of Jeddah Airport.
Al Ali said NB would consider such opportunities, depending on yields. “We are also considering approaching the finance ministry to (ask them to) launch (bond) instruments where they have access to huge liquidity in the market for better development of the country,” he added.
Meanwhile, NB is still studying participation in the Sukuk issued by the Dubai-listed developer Nakheel. He said: “We are still evaluating but the advice we get from the market is that it is a good investment.” Al Ali noted that NB likes the restructuring plan the government has put for Nakheel. Nakheel issued the sukuk as part of its plan to restructure USD 16.1bn in liabilities, according to previous reports.
NB is also looking at various fixed-income Sukuk instruments, in the GCC. It has evaluated five real estate opportunities inside the UAE and is evaluating another real estate opportunity. The latter is a project that has been finished and leased and generates revenues, Al Ali noted