Sukuk

Standard & Poor’s Publishes Islamic Finance Outlook 2009

The new yearbook includes Standard & Poor’s latest analysis and rating methodologies on almost 40 rated Islamic debt issues and issuers, and an overview of its suite of global benchmark and investable Sharia indices.

While total global sukuk issuance more than halved to $14.9 billion in 2008 from $34 billion in the previous year, Standard & Poor’s believes the outlook for Islamic finance remains strong. Sharia-compliant assets now total about $700 billion after growth exceeding 10% annually during the past decade.

Full 70+ pages report for free download at:

http://www.gcc.standardandpoors.com/islamic_finance/Islamic%20Finance%20Outlook%202009%20(12).pdf

Dubai Islamic Bank offers to buy back Sukuk up to USD 200 mn

Dubai Islamic Bank offered to buy back up to USD 200 mn of sukuk. Pricing shall be at least 86 % of face value, but not more than 90 % determined by an auction.

Dubai Islamic has USD 750 mn of sukuk due 2012.

IDB plans USD 500 mn Sukuk end of June

Saudi Arabia’s Islamic Development Bank (IDB), plans to sell USD 500 mn Sukuk by end of June, reported Shanty Nambiar on Bloomberg. The Jeddah-based bank plans to raise as much as USD 5 bn over the next 5 years through 2014 to fund the bank's projects in member countries.

IDB also plans to start a new USD 1.5 bn to USD 2 bn infrastructure fund funded by public and privat sector as joint investors.

S&P: High Financing Costs May Crimp Future Issuance Of Project And Infrastructure Sukuk In The Gulf

High Financing Costs May Crimp Future Issuance Of Project And Infrastructure Sukuk In The Gulf

LONDON, April 28, 2009--The global slowdown, along with local macroeconomic factors, appears to have curtailed the anticipated growth of sukuk (including those for infrastructure and project finance) in the Gulf region, says a report published by Standard & Poor's Ratings Services titled "Islamic Sukuk Come Of Age In Infrastructure And Project Finance." What's more, investor appetite for these instruments may continue to be adversely affected by the high costs of financing, predominantly local investor appeal, a real estate downturn, hydrocarbon prices, and accounting issues.

EcoFirst Consolidated Bhd aims to issue Sukuk year end

EcoFirst Consolidated Bhd, Malaysia hopes to raise about RM 80 mn to RM 100 mn through the issuance of Sukuk by year-end to finance the building of two high rise buildings on top of the mall as well as the mall’s refurbishment, reported Shannen Won in The Star Malaysia.

Malta explored as location to issue corporate Sukuk

In the coming weeks, Malta will be explored by a large institution for its potential to the introduction of the Sukuk

Any organisation interested in participating in an information session being organised with the visiting institution or in having one to one meetings are invited to send an email to Reuben Buttigieg on rbuttigieg@maltamanagement.com

Malaysia's retail sukuk a success

Malaysia's retail Sukuk was a success and oversubscribed, now a second tranche is in preparation.

Moody's: Sukuk market revitalised by Asian Sukuk

New sales of Islamic bonds or sukuk, by Asian governments such as Indonesia are revitalising the market, ratings agency Moody’s said in a report, wrote Uta Harnischfeger in The National. Last week, the government of Indonesia issued its first international dollar sukuk, raising US$650 million (Dh2.3bn). The Sukuk was seven times oversubscribed.

Indonesia's Global Sukuk 'Ba3 ' by Moody's

Indonesia's forthcoming Global Sukuk has been assigned a foreign currency rating of Ba3 with a stable outlook by Moody's Investors Service.

Sukuk to be traded in Saudi this year

Sukuk trading is about to start this year in Saudi according to the chairman of the capital market authority, Dr Abdulrahman Al Tuwaijri.

Danga Capital Sukuk raised MYR 1.6 bn

Danga Capital Bhd., a special purpose vehicle set up by the Malaysia government, raised a Sukuk, offering to MYR 1.6 bn (USD 443 mn) from MYR 1 bn. The 5-year tranche was priced at 4.22 % and the 7-year tranche at 4.49 % at the higher-end of the price guidance.

RAM Ratings has a AAA rating on Danga's planned MYR10 billion program with a long-term stable outlook.

CIMB Investment Bank Bhd. and AmInvestment Bank Bhd. are the joint lead managers and lead arrangers for the issue.

Kuwait and Saudi need to improve Sukuk regulation, expert says

A lack of legislation is seriously hampering domestic issues of Sukuk in Kuwait, forcing companies to go abroad, Abdulkader Thomas, president of consultancy Shape Financial Corp said to Ulf Laessing and Raissa Kasolowsky published on Reuters. A ministerial decree allowing sukuk issued in 2007 was not adequate for the market to flourish, Thomas said. Saudi Arabia would also have to overhaul its legislation for its sukuk market to function more effectively.

Indonesian USD 650 mn Sukuk Al Ijara ahead

Indonesia began gauging interest this week for its maiden global sukuk that is expected to raise up to USD 650 mn. Sri Mulyani Indrawati, finance minister, confirmed that the offering circular for the Sukuk Al Ijara reported John Aglionby in the Financial Times. Barclays Capital, HSBC and Standard Chartered Bank are marketing the Sukuk. t has been rated Ba3 from Moody’s Investors Service, BB- from Standard & Poor’s Ratings Services and BB from Fitch Ratings.

Yields on traditional government bonds are coming down: The government’s 10-year paper is now offering 11.99%, down from above 14 % in February. Indonesia’s credit default swap spreads over US Treasuries have tightened to 491 bps, down from well over 1,000 bps late last year.

GFH plans UK property fund and Sukuk fund

Gulf Finance House plans to launch a GBP 50 mn UK commercial property fund and a USD 50 mn Sukuk fund in the GCC. The USD 50 mn sukuk fund, to launch in the next two weeks pending regulatory approval, would focus on government, quasi-government, or very stable GCC issues, reported Ulf Laessing and Raissa Kasolowsky on Reuters.

PT Matahari Putra Prima Tbk raised bonds and Sukuk

Indonesian retailer PT Matahari Putra Prima Tbk raised a bigger-than-targeted 528 billion rupiah ($46.68 million) from a bonds issuance to help finance business expansion.

Matahari appointed PT HSBC Securities Indonesia, PT Indo Premier Securities and PT Ciptadana Securities as underwriters. It planned to raise 500 billion rupiahand achieved to raise 226 billion rupiah from Sukuk and 302 billion rupiah from conventional bonds. Pricing is about 16 % for 3 years and 17 % for 5 years.

Islamic Development Bank plans Sukuk

Saudi-based Islamic Development Bank (IDB) plans to issue USD 5 bn Sukuk, over the next five years to finance its programmes.

IDB's president Mr Ali said he expected 2009 issue would be priced higher and that the new sukuk would increase the IDB’s 2009 financing programme by 15 %.

European Finance House USD 200 mn Sukuk fund

Esteban Duarte and Neil Unmack reported on Bloomberg on 30 March that European Finance House Ltd. in London, a subsidiary of Qatar Islamic Bank seeks is planning the EFH Global Sukuk Plus Fund, managed by Aleksandar Devic, a former Lehman Brothers credi analyst. The Fund targets USD 200 mn.

EFH’s Luxembourg-based fund is targeting this year a yield of 6 % points more than the 3-m USD LIBOR. The fund will buy sukuk with an average credit rating of A, the sixth-highest investment grade ranking in Standard & Poor’s scale.

Mark Watts is head of asset management at European Finance House an he expects a strong rising Sukuk issuance once capital markets are free again.

HSBC Gets Approval For Selling Sukuk In Hong Kong

HSBC has received approval from the Hong Kong Monetary Authority to sell Sukuk (Islamic Bonds) in Hong Kong, the first local bank in the territory to do so.

Bruno Lee is head of liabilities business and wealth management.

Brunei short term Sukuk

The Ministry of Finance, Brunei Darussalam announced the successful pricing of its 24th, 25th, 26th and 27th issuance of short-term Sukuk Al-Ijarah securities. The accumulated total of these four Sukuk issuance was B$ 165 million; B$ 31 million for Series 24, B$ 60 million for Series 25, B$ 11 million for Series 26 and B$ 63 million for Series 27.

Sukuk sales may reach record on Gulf demand

Sukuk sales may rebound and reach a record this year, with the Gulf accounting for about two-thirds of the debt issued as higher yields attract investors according to NCB Capital. There is an estimated ‘pipeline’ of about USD 39.3 bn of so-called sukuk, Jarmo Kotilaine, chief economist at Saudi Arabia’s NCB Capital, said in a report. He estimates the pipeline from the Gulf Cooperation Council to be USD 24.6 bn.

The average extra yield on corporate and government sukuk above the London interbank offered rate is 12.26 % points, up from 5.76 % points a year ago, according to HSBC-Nasdaq Dubai indexes.

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