Global Sukuk market on track for record year (By IFN)

GLOBAL: The global Sukuk market is on track for issuances projected at a record US$44 billion this year, with sales reaching US$20.5 billion in the first half of 2012, said Rafe Haneef, the CEO of HSBC Amanah Malaysia.

"What we hear is that there are a lot of deals in the pipeline. There is significant development in the Middle East and most of it would be funded through Sukuk," he said.

Financial and debt turmoil in Europe, driving the global liquidity pool to safer markets such as Asia and the Middle East; and mega projects in those regions expected to be funded by Sukuk, will help fuel Sukuk issuances.

Rafe also said that going forward, HSBC is expected to maintain its 35% share of the market for arranging Sukuk; leveraging its presence in Malaysia, Saudi Arabia and the UAE.

Dealogic data shows that debt issuances from the Middle East almost doubled to US$24.3 billion in the first half of this year; around 50% of which comprised sales of Sukuk. The growth of Sukuk sales, which more than tripled from the first half of 2011, has been attributed to issuers’ improved profitability and credit profiles. Borrowers have also benefited from strong liquidity in the Islamic bond market.

Meanwhile, HSBC, which is also the top arranger of debt issuances in the Middle East in the year-to-date, expects to see a “dozen” deals from its conventional and Islamic bond pipeline materialize in the second half of this year. This will be contributed by a number of offerings from Abu Dhabi state-linked entities, which have yet to play an active role in the market this year, said Georges Elhedery, the head of global markets, MENA, at HSBC.

Optimism for the global Sukuk market is also fuelled by the performance of private debt securities (PDS) issuances in Malaysia in the first half of this year; which amounted to RM62.9 billion (US$19.93 billion) during the period, of which Sukuk sales made up 77%.

According to a report by RAM, PDS sales in the country reached a record volume of RM39 billion (US$12.36 billion) in the first quarter of this year. PDS issuances in the first half were also twice that of the same period last year.

See:  http://redmoney.newsweaver.co.uk/1d6gd1yc1fnh38rwoni3wx?email=true&a=6&p=25521555&t=21567895