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Nakheel PJSC’s plan to offer Islamic bonds to creditors may revive sukuk trading in the Persian Gulf after new sales fell to a five-year low, according to Moody’s Investors Service and Mashreq Capital DIFC Ltd. Thomas Barry said that contractors are likely to sell Nakheel’s sukuk to pay bills. Thomas Barry is chief executive officer of Arabtec Construction LLC. In April, the company said its trade creditors would be offered 100 percent recovery of their claims -- 40 percent through a cash payment and 60 percent in the form of a tradable sukuk. More than 80 percent of Nakheel’s contractors have agreed. Abdul Kadir Hussain said sukuk sales from the region are likely to pick up in the fourth quarter. Nakheel and its parent Dubai World, one of the emirate’s three main holding companies, are renegotiating debt terms after the deepest financial crisis since the 1930s roiled Dubai’s real-estate market and left companies unable to raise financing. Property prices have fallen more than 50 percent in the city as banks cut mortgage lending, according to estimates from Colliers International.

Thailand's Securities and Exchange Commission planned to implement its first regulations governing the issuance of sukuk, or Islamic bonds, in October, the head of the watchdog agency said on Wednesday. SEC Secretary-General Thirachai Phuvanatnaranubala told a debt market seminar that the long-awaited launch would be part of Thailand's moves to liberalise and expand its relatively small debt market. State-owned Islamic Bank of Thailand said in June it would be the first issuer of Thai sukuk with a planned offer of 5 billion baht of five- to seven-year Islamic bonds once regulations were in place. SEC chief Thirachai said his agency was in the process of drafting licensing rules for municipal authorities to issue and offer bonds to Thai investors. Thirachai said Thailand and other members of the Association of Southeast Asian Nations had made progress in working out details for licensing cross-border bond issues within ASEAN.

The Jeddah-based Islamic Development Bank (IDB) is gearing up for its latest sukuk offering under its Medium Term Note (MTN) or Trust Certificate Issuance Program. The IDB, according to Mohamed Tariq, senior adviser to the President Ahmad Mohamed Ali, was poised to go to the international financial markets in September this year. In Kuala Lumpur last week, Abdul Aziz Al-Hinai, vice president, finance, IDB, confirmed that the IDB plans to go to the market in the last quarter of 2010. Another international rating agency, Moody's Investors Service, last month had already reaffirmed for a fifth consecutive year the Islamic Development Bank's Aaa long term and P-1 short term foreign currency issuer rating with a stable outlook. Moody's stated that the IDB's rating is strongly supported by the commitment of its member countries, and highlighted that the capital base of the bank is strong, its operational assets continue to perform well, it has a high level of liquidity and very low level of debt. Moody's concluded that the bank's risk profile is likely to remain healthy over the medium term.

Kuveyt Turk Katilim Bankasi AS is planning a second sale of Shariah-compliant debt for 2012. Kuveyt Turk, the Istanbul-based bank owned by Kuwait Finance House KSC, may sell more than $100 million of five-year sukuk. Islamic bond offerings may accelerate in the next 18 months, led by countries new to the market, Mohamed Damak, a Paris-based credit analyst at Standard & Poor’s. Policies to promote assets that follow Islamic law are spreading to Europe from Asia.

The recent launching of the first corporate Sukuk out of the UK by Gateshead-based International Innovative Technologies (IIT) may have taken the Islamic capital markets by surprise, but the signs are that a spate of other UK originations may follow over the next few months. A major GCC-based sukuk arranger confirmed that it has been working on a corporate sukuk issuance for a UK healthcare company for the last year. The company hopes to launch the issuance next month. A London-based Islamic bank is also working on a sukuk issuance for a UK client which is near to being finalized. Tom Wilkinson, chairman of IIT, is confident that there is potential for other UK companies to access Islamic finance including sukuk as an alternative source of funding. The proceeds of the IIT sukuk, according to Wilkinson, will be used as growth capital for the company. The sukuk issue was placed privately with Millennium Private Equity Ltd., leading private equity firm based in the Dubai International Financial Centre (DIFC) and regulated by Dubai Financial Services Authority (DFSA). Millennium Private Equity Ltd. is co-owned by United Gulf Bank (UGB) and Dubai Islamic Bank (DIB).

Kuveyt Turk Katilim Bankasi, a subsidiary of Kuwait Finance House, will pay a coupon of 5.25 per cent on Turkey’s first Islamic bond offering that was oversubscribed, said people close to the transaction. Kuveyt Turk launched the three-year $100 million sukuk on August 17. This is the first ever sukuk from Turkey and the first bank sukuk originating from Europe, according to law firm Norton Rose, which advised on the offering. “This is another significant step towards growing Islamic finance in Europe. “The sukuk by Kuveyt Turk further demonstrates continuing interest and appetite for Islamic finance within key emerging economies,” Neil D. Miller Global Head of Islamic finance at Norton Rose (Middle East), said in the statement. The joint lead managers on the transaction were Citigroup Global Markets and Liquidity Management House.

Sovereign Islamic bonds from Asia to the Persian Gulf are lowering returns on corporate sukuk for the first time in three months.

Malaysia’s Lembaga Tabung Haji fund, France’s BNP Paribas Investment Partners and Duet Mena Ltd. in Dubai forecast government debt will outperform until property prices in the Persian Gulf recover from a slump that prompted credit-ratings companies to downgrade corporate bonds.

Razi Fakih, HSBC Amanah deputy chief executive, says the company is optimistic and sukuk is unlikely to fade out. HSBC has already served as Islamic bond manager on 13 sukuk issues in the first half of the year according Reuters Data. Research firm Oliver Wyman expects industry growth to about 20% until 2012.

The International Islamic Financial Market, the Bahrain-based organization seeking to set standards for Islamic securities, may issue new global guidelines to facilitate the sale of Shariah-compliant bonds, an official at the industry body said.

Property developer Nakheel, a subsidiary of Dubai World, on Tuesday named Ali Rashid Ahmad Lootah as its new chairman in a restructuring that also added four other members to the board. Lootah is also the vice-chairman of mashreq.

Indonesia's finance ministry raised 620 billion rupiah ($68.24 million) in a sukuk auction on Tuesday, well below target, as investors demanded high yields to compensate for a lack of trading liquidity in the paper.

A group of British Islamic banks and government bodies launched on Wednesday a lobby group to further the industry's development and push for the issuance of the first UK sovereign Islamic bond. The UK Islamic Finance Secretariat will incorporate Islamic finance experts currently operating within committees of government organisations such as the UKTI, the government's international business development organisation, the Treasury and the Financial Services Authority (FSA), to strengthen the UK's position as an Islamic finance hub.