Kuwait Finance House is considering a proposal from its shareholders that it list Alafco, its aircraft listing unit, on an international exchange. This is an interesting idea for a number of reasons. First, the international listing would provide an investment opportunity that is relatively rare in the markets outside of the GCC/Malaysia in a Shari'ah-compliant financial institution.
However, I think there are other reasons why it would be a good development. It would facilitate the issuance of more sukuk backed by airplane leases and provide a different type of sukuk that is not widely available in the sukuk markets. The only similar sukuk I am aware of (one specifically set up as an ijara for airplanes) was the GE Capital sukuk, which I wrote about in a post several years ago.
GE Capital has said they would return to the sukuk market, but so far have not. Boeing Capital Corporation's Middle East division has also mentioned the potential for airplane leasing sukuk, but as far as I know has not announced any airplane sukuk. In lieu of other issuers, KFH's Alafco could benefit from a listing on an international exchange if it plans a sukuk offering by becoming more well known among the institutional investors who would be the source of most of the capital for any future ijara sukuk.
No comments:
Post a Comment