Fixed income markets unfazed by Eurozone jitters (By IFN)

GLOBAL: The wider market may be feeling jittery due to the ongoing Greece crisis, but the fixed income space remains unfazed; with Sukuk sales set to continue at a rapid pace.

Yields have also maintained stability and are expected to stay steady going forward. Although the euro declined to a near two-year low on the 24th May, as Greece moved closer towards an exit from the Eurozone, the currency has not been massively devalued; with liquidity still abound in the market, commented the Malaysian head of debt capital markets at a European bank.

Speaking to Islamic Finance news, the banker noted that while the debt market may see some “blips”, these are not due to the Greek crisis; and more as a result of locally-centric factors.

Yields on Malaysian corporate ‘AAA’-rated Sukuk have risen marginally from the beginning of the year, to 3.89% as at the 23rd May; while falling from 3.91% a month earlier, according to data from Bond Pricing Agency Malaysia.

Meanwhile in Dubai, despite a small increase in yields to 4.32% as at the 23rd May from 4.29% a month earlier, yields in the emirate have fallen from 5.28% at the start of the year, data from the HSBC/Nasdaq Dubai Corporate US Dollar Sukuk Index shows.

Continued investor confidence and demand for Sukuk have also helped a slew of issuances this year; with issuers such as Banque Saudi Fransi, The National Industrialization Company (TASNEE) and Dubai Islamic Bank (DIB) successfully tapping the Islamic debt market in the last two weeks.

Banque Saudi Fransi’s US$750 million offering saw orders worth US$4 billion; TASNEE’s SAR2 billion (US$533.31 million) attracted an orderbook of SAR5.2 billion (US$1.39 billion); and DIB’s US$500 million program was oversubscribed four times.

With some banks cutting back on financing, the Sukuk market is clearly providing a booming avenue for corporate fundraising.

See: http://redmoney.newsweaver.co.uk/1x5c01h891ah38rwoni3wx?email=true&a=6&p=24416955&t=21318325