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Tamweel Eyes Dh2b Islamic Bond Despite Crunch

DUBAI — Dubai-based Islamic mortgage lender Tamweel said on Monday it was planning to launch up to Dh2 billion ($544.5 million) in Islamic bonds in the first quarter of 2009 despite the global liquidity crunch.

“There are ideas to sell sukuk to the local market. They would be in the range of Dh1-2 billion,” Chairman Shaikh Khaled Al Nahayan told Reuters on the sidelines of a property fair.

“Already there is a desire (for sukuk),” he said, adding that the liquidity squeeze had only affected certain companies in the financial sector.

Tamweel priced a Dh1.1 billion bond in July. Tamweel and fellow mortgage lender Amlak Finance said on Saturday they were in talks to agree a $2.4 billion merger, but the news failed to lift shares which have been tumbling for weeks on fears that the liquidity crunch has begun to affect Gulf Arab markets.

The merger also comes in the midst of a government crackdown on corruption in the real estate sector, which has already hit market sentiment. Shaikh Khaled declined to comment on the corruption issue but said the current liquidity squeeze would be short-lived.

“There is a liquidity problem but it is in certain institutions in the banking system and not in the whole economy,” he said, adding that the central bank had taken good steps to alleviate any problems.