Gulf banks join up for Islamic investment
By Robin Wigglesworth in Abu Dhabi
Three Gulf banks are set to raise $2.8bn as a consortium to establish two Islamic investment companies specialising in infrastructure and agriculture, plus a jointly managed hospitality investment fund.
Bahrain’s Gulf Finance House, Ithmaar Bank and the United Arab Emirates-based Abu Dhabi Investment House will supply 15 per cent of the capital and raise the rest through private placements in the second half of the year.
All of the investments will be made in accordance with Islamic law, or sharia.
With the Gulf region sitting on a geyser of petrodollars, local and international banks are expanding as governments reinvest their revenue in the domestic economy.
While international banks have the balance sheets to underwrite the finance for large projects, Gulf-based banks claim they have the edge because they have closer relationships with local clients and investors. GFH, Ithmaar and ADIH are all active in Islamic banking, which many Muslim investors prefer.
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