Wednesday, April 15, 2015

GCC players likely to hold off Sukuk plans until the second half, says RAM

Wednesday, 15th April 2015

S&P 500 Shariah
Dow Jones Islamic World
MSCI World Islamic
FTSE Shariah All World
Russell - IdealRatings Islamic Global
1,841.14
2,990.21
1,193.29
2,108.36
1,939.53
2.95 ( 0.16%)
4.11 ( 0.14%)
( 0.70%)
7.98 ( 0.38%)
-2.20 ( -0.11%)

HIGHLIGHTS: Noor Bank plans Sukuk – Emirates Islamic keen to set foot in Morocco – IFSB seeking feedback for upcoming performance plan – GFH considers delisting of shares



Daily Cover

GLOBAL: Sukuk issuers of the GCC are anticipated to postpone their plans of tapping the international Islamic bond market until after June, opined RAM Ratings in its Global Sukuk Outlook 2015. Ascribing the potential delay to uncertainties in global oil prices, the rating agency expects issuers to hold back until the full effects of soft oil prices, including on their credit standing, are thoroughly understood by potential investors. Weaker oil prices aside, other compounding factors fueling market uncertainty for both issuers and investors include current regional geopolitical turmoil in the Middle East, easing monetary policies in Europe and possible rate increase by the US Federal Reserve.

Malaysia is expected to maintain its lead in the global Sukuk market, commanding the majority (60-70%) of international issuance. “Although ringgit-denominated Sukuk issuance was rather slow off the block this year, issues from the infrastructure sector and financial institutions as well as some supply of Islamic securities from Bank Negara Malaysia are expected to keep Malaysia in the lead, with about 60-70% of the global Sukuk market issuances,” confirmed Promod Dass, the deputy CEO of RAM.

Yet, despite the tepid start in 2015, RAM nonetheless projects that at least US$100 billion in new global Sukuk issuance will come to market this year, with a strong probability of that figure hitting US$120 billion. The rating agency is not the only one optimistic of the market’s performance for this year, as industry players are convinced that the sector would likely outperform 2014. “I am optimistic that this pace of issuance will continue and that full year 2015 volumes will exceed last year’s record numbers,” said Andy Cairns, the managing director and head of global debt origination for the National Bank of Abu Dhabi, to IFN (For an in-depth exploration on the topic, see IFN’s latest Cover Story: ‘A banking boom: The competitive market for Sukuk sales’).

Four months into the year, and the world has welcomed innovative and landmark issuances including Emirates Airline’s UKEF-backed deal, Petronas’s US$1.25 billion paper as well as the government of Ras Al Khaimah’s US$1 billion offering. And the pipeline is looking strong for the next 18 months: apart from potential sovereigns from Kenya, Tunisia, Jordan, Oman and Egypt (See IFN Report Vol 12 Issue 15: ‘Sovereign Sukuk – positive progress’), institutional players have also revealed plans to raise funds through the Islamic debt capital markets including Noor Bank, CIMB Group and Garuda Indonesia among others.


Law: An IFN Correspondent Report

Cross-border distribution — A key concern for Islamic funds
There are many considerations to be made, when choosing the fund domicile or the fund type. One key concern for fund managers is the ability to distribute the fund in multiple jurisdictions. Funds in the Middle East, whether conventional or Islamic, face constraints with regard to distribution.

Case Study

World’s first export credit agency-guaranteed Sukuk: Emirates Airline
Emirates Airline on the 25th March 2015 successfully completed the auction of its US$913.02 million Sukuk. With a final orderbook of approximately US$3.3 billion, the issuance was undeniably well received by the market. The Sukuk is the first in the world to be guaranteed by an export credit agency (ECA). Speaking to Nirmal Govindadas, the senior vice-president of corporate treasury at Emirates, NABILAH ANNUAR provides an in-depth account of this historical transaction.




Today's IFN Alerts

UAE: Noor Bank to issue Sukuk under its US$3 billion trust certificate issuance program; Fitch assigns 'A-(EXP)' rating

BAHRAIN: Central Bank of Bahrain issues short-term Sukuk Ijarah worth BHD20 million (US$52.71 million) to overwhelming demand

UAE: Emirates Airline completes US$913.02 million Sukuk issuance

QATAR: Qatar Central Bank lends support to the upcoming IFN Qatar Forum taking place on 3rd May in Doha

MALAYSIA: Islamic Financial Services Board meeting stakeholders on the 19th April to discuss 2016-18 performance strategy

GLOBAL: Emirates Islamic looks to commence operations in Morocco in the next two years

GLOBAL: IDB and United Nations Industrial Development Organization agree to collaborate and create jobs in common member countries

MOROCCO: Morocco revises dirham's currency basket weighting

GHANA: IDB urging Ghana to become a member of the Organization of Islamic Cooperation in order to benefit from development aid

BAHRAIN: Gulf Finance House yet to make decision on de-listing shares on Kuwait Stock Exchange; thorough examination required

QATAR: Barwa Bank sees 2014 net profit surge 41.5% to QAR713 million (US$195.67 million)

MALAYSIA: CIMB Islamic wraps up 2014 with 7.05% growth in net profit at RM391.35 million (US$105.72 million)

SRI LANKA: Amana Takaful selects GrayMatter's Insurance Analytics to execute their business analytic program

MALAYSIA: RAM maintains 'AAA/Stable/P1' ratings on Public Islamic Bank based on its strategic importance to parent bank

YEMEN: Capital Intelligence downgrades outlook on Yemeni banks including Tadhamon International Islamic Bank due to political turmoil and economic weakness


















REDmoney events

IFN Indonesia Forum 2015
22nd April 2015 (Jakarta)

IFN Qatar Forum 2015
3rd May 2015 (Doha)

IFN Asia Forum 2015
25th-26th May 2015 (Kuala Lumpur)

IFN Europe Forum 2015
10th June 2015 (Luxembourg)

IFN Issuers Forum 2015
13th September 2015 (Dubai)

IFN Iran Forum 2015
13th September 2015 (Dubai)

IFN Kuwait Forum 2015
5th October 2015 (Kuwait City)

IFN Egypt Forum 2015
27th October 2015 (Cairo)

IFN Turkey Forum 2015
17th November 2015 (Istanbul)

IFN Saudi Arabia Forum 2015
30th November 2015 (Riyadh)

REDmoney training

Recovery of Islamic Finance Facilities
21st April 2015 (Kuala Lumpur)

Structuring Sukuk & Islamic Capital Market Products
21st - 23rd April 2015 (Kuala Lumpur)

Funds Transfer Pricing
26th - 28th April 2015 (Dubai)

Structuring Sukuk & Islamic Capital Market Products
26th - 28th April 2015 (Muscat)

Legal & Documentation Issues in Islamic Structured Finance
26th - 27th April 2015 (Dubai)

Structuring Islamic Trade Finance Solutions
26th - 28th April 2015 (Riyadh)

Structuring Wealth Management & Private Banking Products
27th - 29th April 2015 (Kuala Lumpur)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
29th - 30th April 2015 (Dubai)

Bank Asset & Liability Management Simulation
4th - 6th May 2015 (Kuala Lumpur)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
7th - 8th May 2015 (Kuala Lumpur)

Islamic Treasury & Risk Management Products
10th - 12th May 2015 (Dubai)

Sharia’a Compliance & Audit for Islamic Banks
10th - 11th May 2015 (Dubai)

Structuring Islamic Trade Finance Solutions
27th - 29th May 2015 (Kuala Lumpur)

Islamic Financial Products: Current Trends, Regulation & Practices
27th - 28th May 2015 (Kuala Lumpur)

Understanding & Applying Structured Products
3rd - 5th June 2015 (Kuala Lumpur)

Advanced Sukuk & Islamic Securitization
7th - 9th June 2015 (Riyadh)

Funds Transfer Pricing
8th - 10th June 2015 (Istanbul)

Asset Liability Management
9th - 11th June 2015 (Kuala Lumpur)

International Best Practices & Regional Standards in Regulation, Corporate Governance, AML, Sanctions & Compliance
10th - 11th June 2015 (Dubai)

Fixed Income Products & Bond Markets
11th - 12th June 2015 (Istanbul)

Accounting & Reporting for Islamic Financial Products
14th - 15th June 2015 (Dubai)

Funds Transfer Pricing
6th - 8th July 2015 (Hong Kong)

Managing Counterparty Credit Risk, Basel III and Recent Regulatory Issues
9th - 10th July 2015 (Hong Kong)

Understanding Islamic Contracts: Structuring & Legal Issues
17th - 19th August 2015 (Dubai)

Advanced Sukuk & Islamic Securitization
24th - 26th August 2015 (Istanbul)

Undertaking Effective Litigation & Recovery in Islamic Finance Facilities
7th - 8th September 2015 (Kuala Lumpur)

Islamic Finance Qualification
5th - 7th October 2015 (Kuala Lumpur)

Funds Transfer Pricing
5th - 7th October 2015 (Kuala Lumpur)

Trading Book Market Risk Management for Financial Institutions
8th - 9th October 2015 (Kuala Lumpur)

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