IslamicFinance.de

The government of Qatar is in talks with banks about a sovereign sukuk issue, sources aware of the matter said on Monday, as the Gulf nation returns to international debt markets to shore up state finances pressured by low energy prices. Bond sales, both in international and loan markets, were identified as the way Qatar would cover its 46.5 billion riyal ($12.8 billion) 2016 deficit, and talks are underway with a small group of banks to select arrangers for the first of these deals, according to three sources with knowledge of the talks. The government may issue the dollar-denominated sukuk as soon as March or April, two of the sources added.

For Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system, the Society for the Worldwide Interbank Financial Telecommunications, is used to transmit payments and letters of credit. A senior official with Iran's central bank said that all the private and state-owned banks have taken the necessary bureaucratic steps, regarding rejoining the SWIFT system. While international banks are expected to link up with their Iranian counterparts via SWIFT, Iran will also be looking to encourage foreign institutions to expand involvement in the country’s financial system. But for many foreign banks, there are concerns about being caught up in ongoing U.S. sanctions.

The United Kingdom, Hong Kong and Luxembourg issued sukuk for the first time in 2014. They gave a huge boost to a market which was once just seen as a funding tool for borrowers from the Gulf and Muslim countries in southeast Asia. Senegal and South Africa also debuted on sukuk markets, lifting the total number of sovereign issuers to 19 so far. But top-notch entities such as Luxembourg and Britain are unlikely to be sukuk regulars. Momentum next year could instead come from emerging economies. Debut issuer South Africa raised $500 million in September. Oman, Kazakhstan, Tunisia, Bangladesh, Jordan, the Philippines and Kenya are also mulling sukuk.