IslamicFinance.de

Kuveyt Turk is planning to sign its murabaha facility next week. The syndicated loan will consist of two tranches — a one year deal paying 205bp all-in and a two year note paying 250bp all-in.

Hong Kong has reiterated its desire to become a hub for Islamic bonds, finally changing its tax laws to be much more sukuk friendly. But with no natural investor or issuer base for the product, and rising competition from better suited Asian countries, Hong Kong will only ever be an also-ran.

Islamic capital markets and Shariah-compliant insurance have so far developed separately. However, linking the two markets could cause momentum for both. A big constraint on sukuk market growth has been the product's lack of secondary liquidity. On the other side, the pool of investable money held by insurance companies is a big target for building capacity in the Islamic capital markets. One point of connection between sukuk and takaful markets is that every sukuk deal is backed by commercial assets which are covered by insurance. So far, sukuk issuers can also use conventional insurance for that matter. However, greater use of Islamic insurance would likely make it more efficient und thus, reduce rates.

This week saw a big surge of MENA bond and sukuk activity, with four dollar deals coming to market and two other issuers lining up roadshows. The wave breaks the recent regional lull and points to a further flurry in the coming weeks as borrowers try to seize a window before the Middle East summer kicks in.

Dar Al Arkan's $450m 5.75% five year sukuk bucked the recent trend by performing well in the secondary market after pricing on Tuesday. The paper traded up to 100.75 bid on Wednesday, having been priced at 99.47. And despite the general market sell-off on Thursday, the notes were still quoted at 100.25 by the close.

Turkey's Bank Asya is set to complete the general syndication stage of its Shariah-compliant loan imminently.

Investors labelled a $500m sukuk from Sharjah Islamic Bank this week as exceptionally tight, but the deal nonetheless drew $3.2bn of orders on Tuesday. The sukuk priced inside the initial guidance range, ending up with a profit rate of 2.95% after the leads mooted low 3% on Monday.

Dubai Electricity & Water Authority has given initial profit guidance of low 3% on its prospective five year benchmark sukuk. The dollar denominated ijara (asset leasing) deal, which could be as large as $1bn, is set to be priced this week.

Nakheel may look to refinance its sukuk borrowings this year due to a reported growing of its 2012 profits. However, an analyst warned of wrong rating and pricing.

For the second time, the Turkish Bank Asya will try to issue a debut dollar-denominated sukuk worth up to $300m. The issuance is planned for the first quarter of 2013. The sukuk is expected to bring up to TL150m ($57m) of lira denominated paper.

The International Islamic Liquidity Management Corp (IILM) intends to issue its first sukuk at the beginning of 2013. A board meeting next week has been scheduled by the company. Plans concerning the issuance will be discussed there an length.