The Jeddah-based Islamic Development Bank (IDB) wants to float a fourth $500 million tranche of a mutual fund on the Istanbul stock exchange (IMKB), according to senior IMKB officials. This would be the first foreign security to be listed on the exchange and would be denominated in US dollars, they add.

If all goes well the facility could be in place by January, officials say. The IMKB has already sent its listing requirements to the IDB in Jeddah.

First, however, a decree may have to be issued by the government permitting the IMKB's executive council to decide autonomously from the treasury on the admittance of foreign instruments. Under existing legislation, dating from 1983, treasury sanction has to be obtained. The IMKB's executive board has approved the facility and is now awaiting a decision by the Capital Markets Board in Ankara, as well as sanction from the state minister for the economy, Aykon Dogan. With their support, the Council of Ministers will be approached for approval for the decree.

The first three tranches of the mutual fund were each valued at $100 million. For the existing tranches, the four-year net annual average yield has been around 7 per cent. The open-ended fund is registered in Jeddah.

The fourth tranche would be an important stage in opening up the exchange to international participation in line with the aims of the IMKB's new chairman, Tuncay Artun, who was appointed in the spring (Turkey, MEED Special Report, 15:7:94, page 12). He envisages the possible opening of a specialised market focusing on international securities at the bourse.