IslamicFinance.de

Yemen will increase a planned 2011 Islamic bond to $500 million, but investors will have to pay high premiums.
The bond issue was delayed to the first quarter of next year to give the government more time to iron out technical aspects of the sale.
Analysts, however, expect the issue to draw thin investor appetite.

Please note the following redemption, received on 22/12/2010:
Issuer: RAKIA SUKUK CO LTD
ISIN: XS0333617420
Paying Agent: MTN
Redemption Type: Full Call
Call Price: 100.00%
Partial Call Price:
Currency: USD
Outstanding Balance: 325,000,000.00
Redemption Date: 23/12/2010

Islamic bonds are outperforming emerging-market debt for a second month as new note sales rebound, Malaysia boosts spending on roads and power plants and confidence returns to the Persian Gulf.
Islamic debt sales increased 34 percent in the second half compared with the first six months.

Global total Sukuk issuance increased to $27.9 billion in the first nine months of 2010, 62.3 percent higher than in the same period last year.
The report forecast that the Sukuk market in 2011 would be driven by the recovery made in the global economic activities, flexible monetary policies, and sovereign fund-raising efforts to support economic growth as well as the revival of private sector projects.
More sovereign issuers are anticipated to tap the Sukuk market in 2011 as governments will continue to raise funds to support economic growth and fund fiscal deficits.

CIMB Group Holdings Bhd. is seeking to boost its business in the Persian Gulf to fight off HSBC Holdings Plc’s challenge to its dominance.
CIMB’s only Persian Gulf deal this year was a $125 million sale in October for a unit of Saudi Arabia’s Islamic Development Bank.

KFHR Limited prepared a report on the Islamic Sukuk market.
The report notes the following:
- In 2011 the Sukuk market will be driven by the recovery made in the global economic activities, flexible monetary policies, and sovereign fund-raising efforts to support economic growth as well as the revival of private sector projects
- the entry of new players in the emerging markets, as well as new non-Islamic exporters willing to take advantage of Sukuk market with potential debut in Thailand, Japan and Europe, which will boost demand for Islamic Sukuk

The issue, known as the Government of Pakistan Ijara Sukuk, is a three-year bond.
The central bank said in October it planned to raise 80 billion rupees by selling Islamic bonds, with the first auction on Nov. 8, with settlement on Nov. 15, in which it raised 51.84 billion rupees .

Saudi International Petrochemical Co (Sipchem) plans to raise at least 1.5 billion riyals ($400 million) by the first quarter of next year to finance expansion.
The funds will be used to finance the firm's capital expansion in its new projects.

Sudan is selling Islamic bonds to local banks after attempts to issue global notes this year failed on investor concern over the country’s conflict in Darfur and a possible breakup after more than two decades of civil war.

The National Bank of Abu Dhabi (NBAD) has successfully issued its second ever Sukuk (Islamic bonds) in Malaysia. The bond issue was for 500 million ringgit and was issued under NBAD’s MYR Medium Term Notes (MTN) 3 billion programme. The transaction has a strong distribution across a wide investor base with a breakdown of fund managers 33%, insurance companies 27%, financial institutions 10%, and other corporations 30%.

The company stopped paying contractors when the emirate's property bubble burst last year and Nakheel's credit-driven expansion ground to a halt. It reached an agreement earlier this year with its banks to delay repayment of $24.9bn of debt for between five and eight years.
Nakheel's Islamic bond, or sukuk, was announced in April. The developer is to pay 60 per cent of large claims by contractors and other trade creditors with sukuk shares and the remainder in cash.

General Electric International Incorporation may tap the Islamic bond market again in "the near future," after the company last year became the first U.S. corporate to issue a sukuk.
GE Capital, the company's financial arm, sold $500 million in sukuk in November last year for general corporate funding.

The National Assembly has blocked the government attempt to attract Middle East oil money by making it easier for local companies to issue Islamic bonds. The reason for this blockage is that some lawmakers objected on religious grounds.
Islamic investors had grown worried about Korea’s ability to tap the Islamic financial market because the sukuk bill had been delayed several times.
The sukuk law would have provided tax breaks for companies that issued the Islamic bonds.

Indonesia’s Islamic bonds may extend this year’s rally that drove yields to record lows on prospects of further ratings upgrades.
PT Bhakti Asset Management’s BIG Dana Muamalah fund bought rupiah-denominated government sukuk in March.

The Palestinian central bank is attracting local banks to its first sale of Islamic bills.
Palestine Islamic Bank will submit a bid for as much as $10 million, and Arab Islamic Bank said it probably will participate.
Palestinian Authority Prime Minister Salam Fayyad is seeking to expand Islamic finance to reduce reliance on aid from the U.S., Europe, Saudi Arabia and others as the territory starts building institutions for a future state.

Fifa bought into the vision of new markets, notwithstanding the oppressive heat of the summer, big vision of small sized Qatar and the perceived instability of the region.
The World Cup should be seen as a new beginning for (economically established) Muslim countries.
A number of stadiums need to be built, infrastructure to connect, and accommodations to house participants, hence, an ideal situation for financing via 'FIFA World Cup sukuk' programme series.
The initial cost estimates of the public works is estimated to be nearly US$50 billion (RM157.15 billion).
Malaysian Islamic banks should look into merits of naming rights for the stadium, and it should be viewed as an investment.

It seems that islamic bonds are not perceived as positively as conventional debt markets.
That was the message from LAU assistant professor of finance Dr Rima Turk Ariss, who was speaking on the sidelines of the fourth Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) conference at the Crowne Plaza.

A South Korean parliamentary panel has reached a tentative agreement to give tax breaks to sukuk bonds, clearing the way for domestic companies to start to sell Islamic bonds as early as next year.

A South Korean parliamentary panel has reached a tentative agreement to give tax breaks to sukuk bonds, clearing the way for domestic companies to start to sell Islamic bonds begining with next year.
The finance ministry had proposed a revision to the tax code with the aim of treating sukuk as a bond so that South Korean issuers of sukuk could enjoy the same tax advantages as those applied to conventional bond issuers.

Prospects Indonesia will get a credit-rating upgrade from Moody’s Investors Services are pulling down yields on government Islamic notes from a two-month high and improving the outlook for a second global sukuk.
Moody’s cited “economic resilience” in putting the country’s rating. The government postponed an offering of Islamic bonds originally planned for July until the first half of 2011.