Healthy deal pipeline for Turkey (By IFN)

Healthy deal pipeline for Turkey

Daily Cover

TURKEY: HSBC Amanah predicts Sukuk sales in the republic of Turkey to hit US$3 billion this year, as corporates and government-related entities exhibit growing interest in tapping the country’s Islamic capital market. According to data from Bloomberg, Sukuk sales in the country have reached US$1 billion so far; with demand from Gulf investors for Turkish paper expected to further drive yields down. Just yesterday, it was announced that the government’s initiative, the Istanbul International Financial Center (IIFC) which was initially tabled in 2009 and is part of the government’s Ninth Development Plan 2007-2013, will finally take off; funded by Shariah compliant instruments. The sole investment bank mandated to raise money for the project, Aktif Bank, confirmed that it will be issuing Sukuk and floating a Shariah compliant IPO backed by real estate certificates based on the IIFC project before June this year. A representative of the bank told Islamic Finance news: “Investors will have the opportunity to convert the certificates into IIFC property and to invest in the very early stages of the project at a favorable purchase price.” Kuwait Finance House Turkey has also revealed plans to debut a lira-denominated Sukuk worth TRY100 million (US$55.77 million), while Bank Asya recently secured a syndicated Murabahah financing facility worth US$380 million via 28 banks. The facility comprised of a US$230.5 million tranche and a EUR115.3 million (US$151.47 million) segment. The republic’s current ruling party, under the patronage of prime minister Recep Tayyip Erdogan, is said to be actively growing the country’s Islamic banking and finance market – or participation banking, as it is called colloquially – to improve trade ties with the Middle East and to encourage already eager Gulf investors into the country.