A promising start to the year
A good start for the Sukuk market with a range of issues in January giving rise to hopes that 2011 could be the best year on record, writes Adnan Halawi
January witnessed a record issuance of sukuk globally. The issues varied from sovereign to quasi-sovereign and corporate and came from different parts of the world.
In January, the Central Bank of Qatar sold QAR33 billion (around US$9 billion) in sukuk to local banks aimed at supporting the country's banking sector and sparking a rebound in private sector lending. The Islamic tranche was almost double the conventional one of QAR17 billion issued on the same day.
In Indonesia, Bank Pembangunan Daerah Sumatera Barat PT (Bank Nagari) issued IDR100 trillion (US$11 million) sukuk on January 11th with a tenor of five years. This is the first corporate sukuk out of Indonesia since July 2010.
Other benchmark sukuk were actually sold in January but their first settlement date falls in early February. These include Emaar's US$500-million Sukuk which begins on February 3rd, 2011 and matures on August 3rd, 2016. The issue which was oversubscribed 3.4 times is the first international issue this year, pays 8.5% on semi-annual basis and will be listed on the London Stock Exchange.
The Malaysian sukuk market saw the birth of two benchmark quasi-sovereign programs toward end of the month. Malaysian state-owned water asset management company Pengurusan Aset Air Berhad successfully priced MYR2.7 billion (US$885 million) worth of sukuk that had been upsized from an original MYR2.5 billion due to strong demand as part of a new MYR20 billion sukuk program. Less than a week later, Pembinaan BLT Sdn Bhd, a wholly-owned construction company of the Malaysian government, has upsized its sukuk offering to MYR1.1 billion, from MYR1.0 billion - part of a MYR10 billion sukuk program.
Other small issues included regular offerings by Central Banks of Bahrain, Malaysia and Gambia and small tranches of existing programs in Malaysia....Read Full Story