Sukuk

‘Why #Nigeria #cannot #shun #islamic #financing #market’

A Chartered Accountant and Tax Administrator, Mr. Bicci Alli has said that the federal government as well as states cannot shun Islamic financial instruments whose market is valued at over $2.6 trillion, because it has the capability to bridge the infrastructure deficit in the country.
The federal government is presently looking for financial and legal advisers and trustee firms to organise its first Islamic bond in the domestic market, the Debt Management Office (DMO) said on Monday. Nigeria is working on a debut sovereign sukuk but has yet to determine the size of a potential deal. Issuance of a sovereign sukuk is part of a plan by Nigeria’s debt office to develop alternative sources of funding and to establish a benchmark curve.

#Sovereign #Sukuk will #end #Nigeria’s recession - IIIBF

The International Institute of Islamic Banking and Finance (IIIBF), Bayero University Kano, has said the Sovereign Sukuk bond to be issued by the federal government in 2017 could be the solution out of recession. Prof. Binta Tijjani, the director of the institute stated this yesterday when she led the management team of the institute on a courtesy call to Media Trust Limited in Abuja.
Recall that initially, the Debt Management Office (DMO) on behalf of the federal government was to issue a Sovereign Sukuk bond this year but shifted it to 2017. The Sukuk Islamic bond is structured in such a way as to generate returns to investors without infringing Islamic law that prohibits riba (interest).

Le premier #sukuk «made in #Morocco» sera «souverain»…

La déclaration récente faite par le ministre de l’Economie et des Finances annonce que le premier sukuk émis au Maroc sera souverain. La structure juridique d’accueil de ce premier sukuk sera un fonds de placement commun de titrisation (FPCT) qui servira de levée de fonds auprès des investisseurs pour le compte de l’Etat. Cette entité spécifique (appelée aussi SPV «Special Purpose Vehicle») pourra être constituée sous forme de fonds de titrisation (FT) avec ou sans personnalité morale, ou de société de titrisation (ST). En optant pour un premier sukuk souverain, le Maroc n’échappe pas aux pratiques internationales en la matière. Les dernières émissions en Afrique vont également dans le même sens (Sénégal, Afrique du Sud, Côte d’Ivoire et Niger).

Maybank sets up RM10 billion #sukuk programme

Malayan Banking (Maybank) has established a sukuk programme of up to RM10 billion in nominal value under the syariah principle of Murabahah. According to Maybank's announcement, the sukuk programme will provide the bank the flexibility to raise funds for its Islamic financial instruments and its business activities. The sukuk programme has been assigned a long-term rating of 'AAA' for issuances of senior sukuk Murabahah and 'AA1' for issuances of subordinated sukuk Murabahah by RAM Rating Services. Maybank IB is the principal adviser, lead arranger and manager, and book runner for the programme.

#Sukuk Market In 2016: Year In Review

Global currency sukuk continued to expand in 2016. Increasing issuances were observed in U.S. dollar, Indonesian rupiah, and Pakistani rupee sukuk, though there were decreases in Malaysian ringgit and Bangladesh taka sukuk compared with last year. The U.S. dollar and Malaysian ringgit sukuk continued to dominate the sukuk market. The Dow Jones Sukuk Index added 17 new sukuk with a total par amount of USD 13.5 billion into the index. Sovereign sukuk continued to dominate the issuance, including USD 2.5 billion from Indonesia, USD 1.5 billion from Malaysia, USD 1 billion from Turkey, and USD 500 million from Oman. The biggest corporate sukuk issuances were USD 1.5 billion from IDB Trust, USD 1.2 billion from DP World, and USD 1 billion from Emirates Islamic Bank. Among all the new issuances, 33% was from the United Arab Emirates.

#Sukuk crucial to diversifying investments: CMA vice chair

Mohammed Al-Quwaiz, vice chairman of the #Saudi Capital Market Authority (CMA), underscored the importance of Sukuk and debt instruments for investors. He made the remarks during the opening of Sukuk Conference with the theme of "Sukuk Market: Challenges and opportunities" in Riyadh. The two-day event was organized by CMA in collaboration with the World Bank. Al-Quwaiz noted that Sukuk and debt markets represent important options to provide funding for various projects and facilities. The conference covers the elements of Sukuk markets, the dynamics of Sukuk markets, ways to create an effective environment for Sukuk market, regulatory issues and corporate governance in Sukuk market, and the role of debt markets in economic growth. The conference is discussing the challenges in Saudi Arabia in particular and in the GCC states in general.

Islamic bank Al Baraka eyes $300 mln Tier 1 #sukuk issue in Q1 2017 -CEO

Al Baraka Banking Group is targeting the sale of capital-boosting sukuk worth $300 million in the first quarter of 2017. The announcement was made on the sidelines of an Islamic banking conference by the group's CEO Adnan Ahmed Yousef. He also added that the issue would enhance the bank's core Tier 1 capital. Al Baraka had a total capital adequacy ratio of 15.15 percent as of June 30, according to a regulatory disclosure on its website.

#Sukuk market long way from 2012 heyday: Report

The sukuk market is struggling to recover from last year’s dip in issuance and it could take years for supply to return. According to a recent Thomson Reuters report, issuance of sukuk is down 18% for the first nine months this year compared with the same period last year, while the year-end figure could exceed $50 billion. Issuance is estimated to gradually recover over the next few years to $54 billion in 2017 and $59 billion in 2018, but this is well below the record $134 billion seen in 2012. This is largely due to the lasting effects of Malaysia’s central bank decision to stop issuing short-term sukuk in 2015. The survey found that Sukuk still lack active secondary markets while governments have yet to incorporate them into their debt management strategies, steps which could increase their appeal.

#Sukuk maintains positive outlook; undeterred by continued slowdown

Thomson Reuters has released the findings of its fifth consecutive Sukuk Perceptions and Forecast study. Despite a bleak 2015, market players remained hopeful for a robust year ahead. Core markets have adapted to ongoing low oil prices, while apprehension over expected global interest hikes has begun to subside. However, the decision from Bank Negara Malaysia (BNM) to cut short-term Sukuk issuances continues to dampen Sukuk supply. Total Sukuk issued in the first 9 months of 2016 dropped further by 18.46% to $39.8 billion from $48.8 billion for the same period in 2015. According to Thomson Reuters' Managing Director, Nadim Najjar, the global Sukuk market continued to drop in terms of volume and value during 2016. The report found that both potential demand and supply of Sukuk are expected to grow, with demand substantially exceeding supply until 2021.

GFH signs final #Sukuk restructuring agreement with Gulf Holding and Al Rajhi Bank

GFH Financial Group (GFH) has signed a final Sukuk restructuring agreement with Gulf Holding Company (GHC) and Al Rajhi Bank. The agreement allows for the rescheduling of the Villamar project’s finances and officially marks the re-launch of the project located in the Bahrain Financial Harbour. Villamar @ The Harbour is one of the flagship projects of GHC and is valued at $700 million, being a residential complex spread over 35,900 square meters. As per the agreement, GFH will participate in financing completion of the project with an amount up to $50 million. The restructuring will have a positive impact on GFH’s shareholding in Gulf Holding Company.

Islamic Development Bank prices $1.25 billion #Sukuk issuance

The Islamic Development Bank (IsDB) has successfully priced a $1.25 billion, five-year Sukuk under its $25 billion Trust Certificate Issuance Programme. The Sukuk was priced at par at 2.263%, to be payable on semi-annual basis. This issuance marked the Bank’s second benchmark issuance in 2016. In terms of the final allocation, the distribution was well diversified with 72% allocated to the Middle East and North Africa (MENA) region, 25% to Asia and 3% to Europe. Central banks and official agencies were allocated 90% followed by 10% to banks. IsDB’s CFO Ahmet Tiktik thanked the member countries and expressed his hope that this funding will continue to support their developmental needs.

#Djibouti sees #Islamic #finance sector #expanding, aims for Sukuk

Djibouti expects to see new entrants in its Islamic finance sector and the government plans to work on a framework to allow the use of Sukuk, or Islamic bonds, to fund infrastructure projects, its central bank governor said.
Djibouti, a country of less than a million people located on the Horn of Africa, is a relative newcomer to Islamic finance, having introduced sector-specific legislation in 2011, but authorities hope it can increase banking penetration in rural areas while also attracting foreign investment.
The government has established a national Sharia board to help oversee the sector, appointing five members to the independent body last week, central bank governor Ahmed Osman said in an interview.
The move could help Islamic finance by improving consumer perception of the industry and providing greater clarity on contracts which follow religious principles such as bans on interest and gambling. The government is in discussions with the Saudi-based Islamic Development Bank to secure a technical mission to help establish a framework to issue sukuk.

The rise of the #Sukuk

The financial crisis of 2008-09 shifted the world's focus towards greater accountability, enhancement in transparency, improvement in governance and a strict limit on leveraging. This has persuaded the world to look towards Islamic finance as a viable financial alternate. The asset-backed nature of Islamic financial transactions, in addition to the prohibition on speculative activities make it a more stable system than its conventional counterpart. Sukuk is being used by many developing countries as a tool of fiscal policy for economic development. Projects like roads, railways, airports and hospitals etc, are particularly appropriate for Sukuk financing. The Pakistani government has issued total 18 domestic Sukuk and three international Sukuk. The financing of infrastructure developmental projects can be achieved through issuance of Sukuk.

#Malaysia: Solar #Sukuk Lights The Way To Alternative Funding Sources: Australia, Indonesia And Malaysia Working Together

SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. SGI-Mitabu will offer its sukuk in Labuan, Malaysia. SGI-Mitabu's sukuk issue is set to be the first Islamic finance offering by an Australian corporate and could provide a useful example of alternative sources of capital to other companies. Companies seeking alternative sources of funding may wish to consider whether a form of Islamic finance would be suitable for their next project, even if they have to look outside their own jurisdiction to make it happen.

#Saudi Investment Bank closes 500 million riyals #sukuk

Saudi Investment Bank closed a 500 million riyals ($133.3 million) Tier 1 sukuk sale on Monday. The subordinated Islamic bond was sold privately. The debt transaction will boost the bank's capital base and its capital adequacy ratio, in addition to diversifying the Saudi bank's funding sources and its maturity profile. The joint lead managers of the transaction were Alistithmar for Financial Securities and Brokerage and J.P. Morgan Saudi Arabia.

Nasdaq Dubai and IdealRatings launch Islamic bond indices

Nasdaq Dubai and IdealRatings have launched a suite of indices tracking the performance of global Islamic bonds. The indices may serve as the underlying to future investment products including exchange-traded funds. To be eligible for inclusion in the indices, each bond must have a minimum size of at least $100m, a remaining time to maturity of at least three months, and must be approved by a Shariah accredited board. The Nasdaq Dubai IdealRatings Sukuk Index family comprises the Global Sukuk Index as well as several indices covering distinct segments of the market. They include investment grade issuances, issuances by sovereigns, issuances by corporates, issuances by financial institutions and Gulf Cooperation Council (GCC) issuances. As of 1 October 2016 the Global Sukuk Index has returned 3.1% year-to-date and 15.2% since the index’s base date of 1 November 2012.

Trump election win delays planned MidEast #sukuks, bonds

The unexpected victory of Donald Trump in the US presidential election caused the Islamic Development Bank (IDB) to wait a bit longer to assess the impact on the regional bond market. IDB will announce this week plans for investor roadshows covering its planned sukuk sale. The issue, expected to be in excess of $1 billion, is one of the few remaining debt sales likely to be completed in the Middle East before the end of this year. Some Middle Eastern bond transactions for which banks had already been mandated have been put on hold and potential borrowers have decided to wait until January to see how markets perform. In addition to the IDB, Abu Dhabi airline Etihad is also expected to launch a sukuk issue soon, likely to be in the $1 billion region. The bond is expected to be executed later this week.

Azimut and Maybank to jointly manage #sukuk fund, seek new markets

Italian money manager Azimut Holding will jointly manage its Islamic bonds fund with Maybank Asset Management Group to cater to growing demand for hard currency sukuk products. The partnership will allow the fund to penetrate new markets including Malaysia and Singapore, where Maybank Asset Management already operates. Azimut launched its global sukuk fund in 2013 which has over $130 million in assets. Maybank Asset Management launched a U.S. dollar-denominated sukuk fund of its own in 2014. Sukuk funds remain tiny compared to their conventional fixed-income counterparts, but the sukuk market has widened in recent years thanks to an increasing number of issuers and investors.

#China Islamic Bond Push Renews as Global-Focused #Funds Quadruple

China plans its first dollar sukuk issuance to tap a four-fold increase in Chinese funds that can invest in bonds overseas. Sichuan Development Financial Leasing plans to sell $300 million of Islamic bonds via Singapore-based special purpose vehicle, Silk Routes Capital. According to investment manager Hasif Murad, the predominant interest for this issuance will remain from yield-hungry domestic Chinese investors. Silk Routes Capital hired Standard Chartered, CIMB Group Holdings, Bank of China and Bank of China International to help to arrange investor meetings. In a sign that the traditional Silk Road is coming back to life, Chinese companies are building roads, railways and ports along the route to the Middle East, Africa and Europe.

#China Islamic Bond Push Renews as Global-Focused #Funds Quadruple

China plans its first dollar sukuk issuance to tap a four-fold increase in Chinese funds that can invest in bonds overseas. Sichuan Development Financial Leasing plans to sell $300 million of Islamic bonds via Singapore-based special purpose vehicle, Silk Routes Capital. According to investment manager Hasif Murad, the predominant interest for this issuance will remain from yield-hungry domestic Chinese investors. Silk Routes Capital hired Standard Chartered, CIMB Group Holdings, Bank of China and Bank of China International to help to arrange investor meetings. In a sign that the traditional Silk Road is coming back to life, Chinese companies are building roads, railways and ports along the route to the Middle East, Africa and Europe.

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