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GLOBAL: Moody’s
Investors Service yesterday released a report noting that Malaysian Sukuk
issuances are expected to fall short this year against 2014’s US$20 billion
figure as the market continues to wrestle an environment of softer
commodity prices and volatile foreign exchange. While the Malaysian Islamic
bond landscape may be going through a dry spell, however, it should be
noted that the Islamic finance powerhouse’s shrinking global Sukuk market
share (40% in 2014, against 58% of outstanding Sukuk as of the 31st
March 2015) is indicative of a maturing market buoyed by a stronger
presence by other jurisdictions.
“Malaysia’s declining share of global issuance reflects the increasing
internationalization and diversity of Islamic capital markets,” confirmed
Khalid Howladar, Moody’s global head of Islamic finance. The rating agency
highlighted Indonesia, the UAE, Saudi Arabia, Turkey and Qatar as issuers
growing in stature.
Indonesia is particularly noteworthy. The government just revealed plans to
raise IDR10 trillion (US$751 million) via sovereign Sukuk next week from
the domestic market and today issued US$2 billion-worth of Sukuk under its
existing trust certificate issuance program, the limit for which was
doubled to US$10 billion in April. The global offering was sold at 4.325%
(according to Bloomberg), and is the country’s largest international Sukuk
offering. The Republic is having a phenomenal run with both its domestic
and international Islamic issuances. Its monthly Shariah securities
auctions have been exceeding targets set since the beginning of 2015, with
the latest one this week receiving a whopping IDR5.08 trillion (US$385.06
million) in bids (indicative target was IDR2 trillion (US$151.6 million));
while its previous US$1.5 billion dollar Sukuk sold in September attracted
over US$10 billion in bids. It also must be mentioned that flag carrier
Garuda Indonesia is currently conducting its US$500 million global Sukuk
roadshow, expected to end on the 26th May.
The 12th IFSB Annual Summit, concluded yesterday, was stage to a
slew of promising developments including a renewed commitment to capacity
building in partnership with INCEIF, and the release of the latest Islamic
Financial Services Industry Stability Report. Confirming that it is
readying guidelines for re-Takaful and Islamic capital market instruments,
interestingly (and perhaps worryingly), the IFSB noted that the Islamic
finance industry is seeing a decline in risk-sharing, a characteristic
unique to Shariah finance (See Daily Cover 21st May 2015). It is
also during the summit, held in Almaty, that Kazakhstan stepped up its
Islamic finance game as central bank-backed Association for Development of
Islamic Finance (ADIF) engaged the Shariyah Review Bureau to assist it in
making the country a regional Shariah finance hub. ADIF’s commitment
follows various other initiatives by the Republic to cement its Islamic
finance lead in Central A sia (See IFN Report Vol 12 Issue 20: ‘Kazakhstan
means serious business – looking outwards for expansion’).
In people news: Dubai’s Amlak Finance, which will resume trading on the 2nd
June, named Ali Ibrahim Mohamed as the chairman of its board of directors,
Essamuddin Hussain as the vice-chairman and Arif Abdulla Alharmi as the
managing director; while Abu Dhabi-based National Takaful Company confirmed
that its head of legal administration, Mohamed Iss-haq Hamdan, will assume
the position of acting CEO until a replacement for previous chief Osama Al
Kaissi, who resigned, is found. In Turkey, Islamic banking veteran Mehmet
Ali Akben has been appointed to head the country’s banking watchdog,
Banking Regulation and Supervision Agency. Qatar International Islamic Bank
named Sheikh Abdulaziz Abdullah Faisal Al Thani as the head of government
banking services sector and Qatar Islamic Bank hires the former head of
treasury of Doha Bank to lead its treasury department.
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