Monday, March 31, 2014

AsianBondsOnline Newsletter (31 March 2014)


News Highlights - Week of 24 - 28 March 2014

The Republic of Korea's real gross domestic product (GDP) growth accelerated to 3.0% in 2013 from 2.3% in 2012, based on preliminary estimates from The Bank of Korea released last week. Annual real GDP growth in 2013 was bolstered by stronger growth in gross fixed capital formation on the expenditure side and by agriculture, forestry, and fishing;  manufacturing; construction; and services on the production side. On a year-on-year (y-o-y) basis, real GDP growth climbed to 3.7% in 4Q13 from 3.4% in 3Q13. Meanwhile, the Fiscal Policy Office of the Ministry of Finance in Thailand announced last week that it expects the domestic economy to grow 2.6% in 2014, a downward revision from its earlier projection of 4.0% announced in December. 

*     Industrial production in the Republic of Korea was down 1.8% month-on-month (m-o-m), but up 4.3% y-o-y, in February. In Singapore, manufacturing output grew 12.8% y-o-y in February, following revised growth of 4.4% in the previous month, mainly driven by the biomedical manufacturing sector, which grew 19.3%. Thailand's manufacturing activity continued to weaken as the manufacturing production index fell 4.4% y-o-y in February.

*     Hong Kong, China's exports fell 1.3% y-o-y in February while imports rose 6.8%. As a result, the trade deficit rose to HKD53.7 billion in February from HKD34.0 billion in the same period last year. The Philippines' trade deficit nearly doubled to US$1.4 billion in January from US$0.7 billion a year earlier as y-o-y growth in imports exceeded that for exports. Total exports rose 9.3% to US$4.4 billion, while imports increased 21.8% to US$5.8 billion.

*     Singapore's consumer price inflation eased to 0.4% y-o-y in February from 1.4% in January. In Viet Nam, consumer price inflation eased to 4.4% y-o-y in March-the slowest pace since November 2009-from 4.7% in February. In Japan, consumer price inflation in February slightly increased to 1.5% y-o-y from 1.4% in the previous month.

*     The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) decided to keep its key policy rates--the overnight borrowing and lending rates--steady at 3.5% and 5.5%, respectively. The reverse repurchase rate, repurchase rate, and BSP's special deposit account facility were also kept steady. Meanwhile, the reserve requirement was raised by 1 percentage point to 19.0% effective 4 April 2014.

*     Fitch Ratings last week affirmed the long-term foreign currency (FCY) and local currency (LCY) issuer default ratings of the Philippines at BBB- and BBB, respectively, with a stable outlook for both. The rating agency also affirmed the Philippines' senior unsecured FCY and LCY bonds at BBB- and BBB, respectively.

*     LCY corporate debt issues in the Republic of Korea amounted to KRW8.6 trillion in February, up 1.6% m-o-m, based on the Financial Supervisory Service report released last week.

*     Government bond yields fell last week for most tenors in Indonesia, the Republic of Korea, Thailand and Viet Nam, while yields rose for most tenors in Malaysia and the Philippines. Yield movements were mixed in the PRC; Hong Kong, China and Singapore. Yield spreads between 2- and 10-year tenors widened in the PRC, while spreads narrowed in the rest of the emerging East Asian markets.


Islamic finance finds a niche in funding educational projects

IFN Indonesia Forum 2014
15 days to go
Monday 31st March 2014
Daily Cover
GLOBAL: Education is an area of social development that the IDB has targeted with particular focus, with over US$30 million in funding approved and allocated for educational projects since December. The Hyderabad Institute of Excellence, an Indian school recently established with aid from the IDB, is an example of the education funding of the bank in practice, as government and commercial interest in the use of Islamic finance for education projects grows.

Since December, the IDB has approved over US$1.5 billion in new financing. Off this, US$32.3 million has been earmarked for use in educational development in countries such as Bosnia Herzegovina, Guyana, Thailand and the US. Of the US$4.7 million allocated by the IDB as aid for Syrian refugees, US$700,000 was flagged as funding for education. In February this year, US$9 million was approved for 'Basic Education Support Project in Priority Areas' in Cameroon and this month, the bank announced the allocation of US$17.8 million, encompassing US$7.5 million for a project in Burkina Faso and US$10.27 million for another in Suriname.

In the commercial space, two high profile instances saw the use of Sukuk to fund the building of schools in 2013: the US$200 million GEMS Education Sukuk issued in November and, in October, the first Nigerian Sukuk Ijarah from Osun State for NGN10 billion (US$59.88 million). Last year, Islamic Bank of Britain also provided funding of GBP400,000 (US$652,276) for the completion and refinancing of development works on the premises of Al-Meezan, a non-profit organization providing a center for the promotion and development of Islamic learning in Glasgow, Scotland.

Given the importance of education, especially in emerging economies, it is a positive sign that Islamic financing of educational projects continues to grow. Kunrat Wirasubrata, the head of the IDB regional office in Kuala Lumpur, outlined to Islamic Finance news the bank’s commitment to continue in its support: “The appetite to use Islamic financial products is increasing, so it’s a matter for the IDB and others who are active in Islamic finance, to capture the opportunity and work out how to formulate a suitable product to provide financing to the growing educational sector. We are committed to continue financing and we are interested to work with partners.”

Today’s IFN Alerts

Latest Supplements
March 2014
March 2014

Deals of the Year Handbook

IFN Indonesia Forum 2014
15th April 2014
by REDmoney events

IFN Asia Forum 2014
26th- 27th May 2014
by REDmoney events

IFN Iran Forum 2014
17th June 2014
by REDmoney events

IFN Europe Forum 2014
26th June 2014
by REDmoney events

IFN Global Forum 2014
15th - 16th September 2014
by REDmoney events

IFN Kuwait Forum 2014
29th September 2014
by REDmoney events

IFN Sri Lanka Forum 2014
13th October 2014
by REDmoney events

IFN Bangladesh Forum 2014
20th October 2014
by REDmoney events

IFN Africa Forum 2014
4th October 2014
by REDmoney events

IFN Turkey Forum 2014
6th November 2014
by REDmoney events

IFN Saudi Arabia Forum 2014
17th November 2014
by REDmoney events

IFN Egypt Forum 2014
1st December 2014
by REDmoney events

Shariah Audit for Islamic Retail & Commercial Banking Products
10th - 11th April 2014 (Kuala Lumpur)
by MIF training

Shariah & Legal Issues in Sukuk Structuring and Documentation
13th - 15th April 2014 (Dubai)
by MIF training

Accounting & Reporting for Islamic Financial Products
13th - 15th April 2014 (Dubai)
by MIF training

Business & Operational Strategies for Islamic Financial Institutions
15th - 17th April 2014 (Kuala Lumpur)
by MIF training

Structuring Islamic Trade Finance Solutions
15th - 17th April 2014 (Riyadh)
by Islamic Finance training

Structuring Islamic Trade Finance Solutions
28th - 30th April 2014 (Istanbul)
by Islamic Finance training

Advanced Sukuk & Islamic Securitization
4th - 6th May 2014 (Riyadh)
by Islamic Finance training

Impact of IFSA on the Islamic banking industry in Malaysia
28th May 2014 (Kuala Lumpur)
by Islamic Finance briefings

Advanced Sukuk & Islamic Securitization
19th - 21st August 2014 (Istanbul)
by Islamic Finance training

Islamic Fund and Asset Management
25th - 26th September 2014 (Kuala Lumpur)
by Islamic Finance training

Advanced Sukuk & Islamic Securitization
10th - 12th November 2014 (Kuala Lumpur)
by Islamic Finance training

Advanced Sukuk & Islamic Securitization
8th - 10th December 2014 (Dubai)
by Islamic Finance training

Deals of the Year Handbook

IFN Supplements
15 days to go

31st March 2014

Deals of the Year demonstrates another bumper year for Islamic finance
It was another action-packed year for Islamic finance in 2013, and the IFN Deals of the Year Awards displayed the exceptional development of the industry over the past 12 months. Although Sukuk performance saw a less stellar performance than 2012 on the back of Fed tapering fears, the capital markets continued to soar: boosted by strong equity performance and ongoing strides in innovation and deal size.

While structures tended to err on the side of old favorites we certainly saw some exciting new deals emerge, with our overall winner IILM surging forward to take the prize with a landmark deal that we can hope will alter the face of Islamic institutional liquidity management globally.

The leading markets remained strong: with the UAE, Malaysia and Saudi Arabia all pushing forward to expand their domestic markets. However we also saw a multitude of newer players surge forward, including Turkey, Pakistan, Egypt, Nigeria and Oman: all of which bode well for the ongoing development of the market.

With a record-breaking 400 deals nominated in more than 30 categories, the size and scope of the IFN Deals of the Year continues to grow, making it one of the most respected and sought-after accolades of the industry.

In the latest Deals of the Year Supplement we bring you the best of the best of the Islamic finance transactions from 2013 – and we can assure you that it is an inspiring read.

Deal of the Year & Sukuk Deal of the Year
IILM’s US$2 billion Sukuk program
In August 2013, the International Islamic Liquidity Management Corporation (IILM) successfully launched a US$2 billion Sukuk program. The program was assigned a short-term rating of ‘A1’ by S&P.
Best Islamic Bank Jordan
Solid principles with innovative solutions
In culmination of the ongoing efforts in developing products and services of Islamic banking, Jordan Dubai Islamic Bank (JDIB) was awarded the ‘Best Islamic Bank in Jordan for 2013’ at a ceremony held on the 24th February in Dubai, organized by REDmoney Group, the parent company of Islamic Finance news (IFN).
Equity Deal of the Year
Total control: BIMB Holdings’ acquisition of Bank Islam
Malaysia’s pioneer Shariah compliant investment holding company, BIMB Holdings (BIMB), made a move to acquire a combined 49% stake in Bank Islam from Dubai Financial Group (DFG) and Malaysia’s Hajj pilgrimage fund board Lembaga Tabung Haji (LTH).

IPO Deal of the Year
Al Noor Hospital IPO: A bellwether for UAE companies seeking to list internationally
Al Noor Hospitals Group, the largest integrated healthcare private service provider in Abu Dhabi, has floated a GBP221 million (US$330 million) initial public offering (IPO) on the London Stock Exchange (LSE) on the 21st June 2013.
Project Finance & Infrastructure/Saudi Arabia Deal of the Year
Sadara Chemical Company’s Sukuk oversubscribed
As part of a US$19.3 billion fundraising package, Sadara Chemical Company, issued a SAR7.5 billion (US$2 billion) Sukuk Musharakah through its SPV, Sadara Basic Services Company.
Africa Deal of the Year
Sub-Saharan Africa’s first Sukuk issuance: Osun State, Nigeria
Carving a mark in history, Nigeria auctioned its first NGN10 billion (US$59.82 million) Sukuk Ijarah on the 10th October 2013. Issued by the government of Osun State, the seven-year Sukuk is due for maturity in the year 2020 at a profit rate of 14.75%.
Europe Deal of the Year
FWU’s Sukuk Wakalah Program
Atlanticlux Lebensversicherung a ‘BBB’ rated, multinational insurance provider, and a subsidiary of German-based FWU, which focuses on customized investment products linked to life insurance and pension schemes, successfully auctioned the first series of its US$100 million Covered Sukuk Wakalah Issuance Program which has been assigned an investment grade credit rating by Fitch.
Indonesia Deal of the Year
Golden Agri-Resources’ US$490.95 million Sukuk Murabahah
Golden Agri-Resources (GAR), a Singapore-listed palm oil plantation company, issued a RM1.5 billion (US$490.95 million) Sukuk Murabahah on the 19th November 2012, as part of a 15-year ringgit-denominated Islamic medium-term notes program of up to RM5 billion (US$1.52 billion).
Turkey Deal of the Year
Providing innovative trade finance solutions
The International Islamic Trade Finance Corporation (ITFC) is an autonomous entity within the IDB Group created with the purpose of advancing trade to improve the economic condition and livelihood of people across the Islamic world.
UAE Deal of the Year
Comeback kid: Dubai hits back with the first sovereign Sukuk of 2013
The government of Dubai, via its department of finance, has successfully issued a dual-tranche bond with a Sukuk feature, worth US$1.25 billion.

Deals of the Year Results
Some bankers and analysts were disappointed that 2013 brought a less robust performance in the Sukuk sector than 2012’s record-setting year. However, the leading markets continued to cement their strong performance, while new players also emerged on the scene to demonstrate the ever-widening global scope of the Islamic capital market.


Advertising Opportunities

Geraldine Chan

Director & Deputy Publisher
Direct Line: +971 4 427 3628
Mobile: +971 55 108 5450
Fax: +971 4 431 4614

Mohamed Maksoud
Head of Business Development EMEA
Direct Line: +971 4 427 3624
Mobile: +971 56 708 2404
Fax: +971 4 431 4614

Steve Stubbs
Business Development Manager
Direct Line: +603 2162 7800 ext 55
Fax: +603 2162 7810

Subscription Opportunities

Ifran Tarmizi
Subscriptions Manager
Direct Line: +603 2162 7800 ext 63
Fax: +603 2162 7810

Mithun Gangolli
Accounts Manager - Subscriptions
Direct Line: +971 4 427 3638
Mobile: +971 5 67314913
Fax: +971 4 431 4614

Musfaizal Mustafa
Subscriptions Director
Direct Line: +603 2162 7800 ext 24
Fax: +603 2162 7810

Nurazwa Rabuni
Administration & Support Executive
Direct Line: +603 2162 7800 ext 68
Fax: +603 2162 7810

Related Posts with Thumbnails