By Bernardo Vizcaino

Turkish participation bank Kuveyt Turk plans to issue sukuk, or Islamic bonds, in Malaysia aiming to raise as much as 2 billion ringgit ($625.3 million), its first foray into the Southeast Asian Islamic debt capital market.

Kuveyt Turk, 62 percent owned by Kuwait Finance House, will sell the sukuk to qualified investors through its asset-leasing company, KT Kira Sertifikalari Varlik Kiralama, according to Turkey's Capital Markets Board.

No timeframe was given for the deal. The last time Kuveyt Turk was last in the market was in June, when it issued a $500 million five-year sukuk that attracted more than $3.25 billion in orders.

In July, Turkiye Finans became the first Turkish lender to issue ringgit-denominated sukuk in Malaysia when it raised 800 million ringgit ($252.2 million) from a 3 billion ringgit programme it set up in June.

An accommodative tax regime and strong demand from local investors have made Malaysia an attractive market for issuers from across Asia and the Middle East.

In June, Bank of Tokyo-Mitsubishi UFJ, Japan's largest lender, set up a $500 million multicurrency sukuk programme in Malaysia.

Malaysia has the world's largest and most liquid sukuk market, accounting for two-thirds of total sukuk issuance, but authorities are keen to internationalise its Islamic capital markets which remains dominated by local-currency deals.

Year-to-date sukuk issuance in Malaysia has reached the equivalent of $61.6 billion through 325 deals, compared to $53.6 billion through 435 deals in the same period last year, according to data from Zawya, a Thomson Reuters company.


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