MANAMA: Bahrain-based Islamic investment house Tharawat said it plans to raise $100 million by year-end for a sukuk fund it recently launched to snatch up bargains on the secondary market. Chief Executive Arif Mohammad Al-Alawi also told Reuters on Monday Tharawat expected to raise $200 million for the open-ended fund targeting individuals and institutional investors over the next two years. Al-Alawi said large financial institutions have exited the sukuk market to free up liquidity and sukuk could be bought on the secondary market at discounts of 20-40 percent. “This will not last long as the economies are getting better, within a year the margins on the discounts will shrink,” he said.
Investors in the Gulf Arab region are also looking for new asset classes besides equities and battered real estate markets, and several banks have recently launched or are planning to launch sukuk funds, which will add depth to the market.
Al-Alawi said the Gulf Arab market for investment products remained difficult, with investors reluctant to move out of the cash they fled into when the global financial crisis reached the region late last year. “Investors need to see a tangible project (to invest in), rather then a private placement memorandum passing around,” he said.
