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Islamic Finance news Guide 2008
Page 20
LMC’s Role in the Primary and Secondary
Islamic Capital Market
By Liquidity Management Centre
Liquidity Management Centre (LMC/the bank), an
Islamic investment bank regulated by the Central
Bank of Bahrain (CBB, formerly the Bahrain
Monetary Agency), was incorporated in July 2002
with the aim of providing optimal Islamic fi nancing
and investment solutions contributing to the growth
of the Islamic capital market.
Today, LMC plays an active role in the primary and secondary
Islamic fi nancing market delivering innovative, adaptable and
tradable Islamic Shariah compliant short- and medium-term
fi nancial instruments to Islamic fi nancial institutions in order
to invest their surplus funds. LMC’s experience and knowledge
of the Islamic capital market enables it to also provide Islamic
advisory services, including (but not limited to) the areas of
structured fi nance, project fi nance and corporate fi nance.
With an authorized capital of US$200 million and a paid-up
capital of US$51 million, LMC proudly shares a close working
relationship with its shareholders — all renowned in the
Islamic fi nancial market for their contribution to the industry,
and all hold equal shares in LMC: Bahrain Islamic Bank BSC
(Kingdom of Bahrain), Dubai Islamic Bank PJSC (UAE), Islamic
Development Bank (Saudi Arabia) and Kuwait Finance House
KSC (Kuwait). Moreover, LMC is keenly seeking the opportunity
to further increase its capital this year.
LMC boasts signifi cant achievements in a span of six years
with a sound track record, acknowledged by industry leaders
around the world. Led by a highly experienced and qualifi ed
management team comprising CEO Ahmed Abbas and
chief operating offi cer Khalid Bucheeri, and supported by a
professional technical and placement team, LMC has achieved
a high level of transactional and product diversity. The bank
has proven to be a leading arranger of Sukuk (Islamic bonds),
having issued a number of innovative Sukuk with adaptable
and recognized structures that have been refl ected in other
Sukuk issued in the region.
The bank’s focus has not only been on bringing long-term
fi nancing opportunities to market but also on developing
short-term Shariah compliant investment opportunities. It
pioneered the structure of its short-term Sukuk program, a
tradable low-risk liquidity management product that gives
investors the opportunity to invest in short-term Sukuk having
monthly tenors that are secured by a diverse portfolio of
asset backed corporate and sovereign Sukuk instruments
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arranged and administered by LMC. The program is the fi rst
such repackaged Sukuk product to be offered in the Islamic
banking market. Currently, the program stands at a total size
of US$300 million and further sustained growth is anticipated
throughout 2008.
“LMC’s experience and knowledge
of the Islamic capital market
enables it to also provide Islamic
advisory services, including (but not
limited to) the areas of structured
fi nance, project fi nance and
corporate fi nance”
With the ultimate long-term vision of contributing towards
the development of a standardized framework for Islamic
investment banking, LMC not only benefi ts from its own
Shariah supervisory board but also enjoys the support of its
prominent shareholders, board of directors and that of the
CBB.
LMC primary market arrangement activities
LMC has had a creditable track record of primary market
Sukuk issuances since mid-2003. The diversifi ed array of
Sukuk arranged is summarized below:
1. BAHRAIN — Bahrain Monetary Agency Ijarah Sukuk
US$250 million issued in June 2003
• LMC’s fi rst Sukuk, and the fact that it was a
sovereign issuance was testimony to the CBB’s
belief in LMC’s capabilities.
• The Sukuk structure was an Ijarah Sukuk over
designated government buildings.
2. UAE — EMAAR Sukuk US$65 million issued in June
2004
• This was the fi rst corporate real estate Sukuk
issued in the UAE and a landmark transaction for
LMC, given the market standing of EMAAR.
• The Sukuk structure was essentially an Ijarah
Sukuk over designated buildings.
• The issue was domestically listed in Bahrain.
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