Turkish treasury mandated the Dubai Islamic Bank, HSBC, and Standard Chartered to explore opportunities for a possible sukuk issue. A series of investor meetings will be organised in the UAE on March 28, 2017. Meanwhile, the country’s monetary authority raised its highest interest rate while leaving all of the other rates unchanged. The lira rallied as the move was seen paving for they way for tighter policy and serving as insurance against bouts of currency weakness.
Saudi Arabia hired Citigroup, JPMorgan Chase and HSBC as global coordinators on its international Islamic bond sale. The kingdom also picked Deutsche Bank and BNP Paribas among others as lead managers for the sale. The sukuk could come as soon as this month. Saudi secretary-general of the Finance Committee, Mohammad Al Tuwaijri, announced in December the kingdom's plans to raise between $10 billion and $15 billion from international bond markets in 2017 and sell about 70 billion riyals locally. The world’s biggest oil exporter is considering international and domestic debt issues to help finance its budget deficit.
A Riyal denominated Sukuk has been issued by the Saudi International Petrochemical Company. The company announced the successful completion of the issuance amounting to SAR 1.0 bn on June 16, 2016. The Sukuk was priced at 235 bps over six months SAIBOR for tenor of five years maturing on June 16, 2021. Riyadh Capital and NCB Capital helped to arrange the private issuance.
In the hard currency space, the Commercial Bank of Qatar issued a Eurobond which achieved the tightest spread for a MENA financial institution this year, conventional or Sukuk.
Whilst the issuance was not a Sukuk, demand for bond indicates strong investor appetite, a good sign of market demand which is likely to be tested with several large planned issuances post Ramadan. Most eagerly anticipated is a potential sovereign issuance by Saudi Arabia, as well as by Aramco, the Saudi national oil giant.
Saudi Arabia's Bank Al Bilad has received regulatory approval to issue a capital-boosting sukuk worth as much as 2 bn riyals ($533.3 m), it said in a bourse statement on Sunday.
The issue will enhance its Tier 2, or supplementary, capital and last for 10 years, although the bank has the option to redeem the sukuk after the fifth year, according to the filing.
Sources told Reuters last month that Bank Al Bilad, one of the smaller lenders in Saudi Arabia, had chosen HSBC's local unit to arrange the Islamic bond offering. ($1 = 3.7502 riyals)
National carrier Saudi Arabian Airlines (Saudia) has appointed HSBC as the lead arranger for a 5 billion riyal ($1.3 billion) sukuk issue. According to director general Saleh al-Jasser the sukuk would be sold in the second half of the year. Jasser said last month that the sukuk offering would finance fleet expansion, with the carrier aiming to operate 200 aircrafts by 2020.
The emirate of Sharjah is targeting a five-year sukuk offering and could launch a transaction as early as this week, a document from lead arrangers showed on Tuesday. The sovereign finished roadshows on Monday in London, following investor meetings in the Middle East and Asia last week, and was now in the process of receiving feedback from the market, the document added. The emirate mandated Bank Of Sharjah, Barclays, Commerzbank, Dubai Islamic Bank, HSBC and Sharjah Islamic Bank to arrange the meetings and the possible transaction. Sharjah was reported to be planning to raise funds through a dollar-denominated sukuk of benchmark size, in what could be the first sovereign Islamic bond issuance from the region this year.
The emirate of Sharjah has picked six banks to arrange investor meetings starting next week ahead of a potential dollar-denominated sukuk issue, a document from lead arrangers showed on Wednesday. The sovereign has mandated Bank Of Sharjah, Barclays, Commerzbank, Dubai Islamic Bank, HSBC and Sharjah Islamic Bank to arrange the transaction. Investor meetings will be held starting Sunday in the Middle East, Asia and the United Kingdom and a deal will follow subject to market conditions, the document added.
Turkish Islamic bank Kuveyt Turk has mandated six institutions for a sukuk with a value of up to $400 million with a maturity of 10 years, it said in a statement to the Istanbul stock exchange late on Thursday.
Kuveyt Turk Participation Bank, which is 62 percent owned by Kuwait Finance House, said it had mandated KFH Capital, Dubai Islamic Bank, HSBC, Noor Bank, QInvest and Emirates NBD as joint lead managers. Sources familiar with the matter told Reuters in September that seven banks had been picked to arrange a potential deal.
Jeddah-based Islamic Development Bank (IDB) is set to meet fixed income investors starting Sunday ahead of a potential dollar-denominated sukuk transaction. The AAA-rated IDB has picked nine banks to arrange investor meetings in the Middle East and Asia, a benchmark offering will follow, subject to market conditions. CIMB, Dubai Islamic Bank, GIB Capital, HSBC, Natixis, NCB Capital, National Bank of Abu Dhabi, RHB Islamic Bank and Standard Chartered have been chosen to arrange the sukuk sale. IDB, which last issued $1.5 billion in five-year Islamic bonds in September, is looking to increase its issuance of sukuk, partly to raise its profile among international investors and to secure similar pricing levels to other development banks.
Low-cost carrier flydubai is in talks with its advisers for a potential bond issuance. Earlier reports citing unnamed sources, Dubai’s low cost airline had mandated seven banks — Credit Agricole, Dubai Islamic Bank, Emirates NBD, HSBC, National Bank of Abu Dhabi, Noor Bank and Standard Chartered — to arrange a potential debut sukuk issue
According to the finance minister, Luxembourg has issued its first 200 million euro ($254 million) five-year Islamic bond, distributed across 29 accounts, although the market favours dollar-denomineted sukuk. Nevertheless the country thereby becomes the first AAA-rated government to issue euro-denominated sukuk, or Islamic bonds, following London, Hong Kong and South Africa. Luxembourg hired HSBC, BNP Paribas, Banque Internationale à Luxembourg and Qatar-based QInvest to arrange its sukuk.
Turkey's Kuveyt Turk, owned by Kuwait Finance House, mandated banks for a sukuk issue. The bank has mandated KFH Investment as global coordinator and Citi, Emirates NBD Capital, HSBC, KFH Investment and Standard Chartered Bank as joint lead managers and joint bookrunners.
Islamic Development Bank (IDB) has picked seven banks to arrange meetings with fixed income investors ahead of a potential sukuk issue. The banks are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered. IDB will hold roadshows in the Middle East and Asia commencing February 23, with a dollar-denominated Islamic bond to follow subject to market conditions. The AAA-rated bank last sold a sukuk in May, when it priced a $1 billion five-year Islamic bond with a profit rate of 1.535 per cent.
Ooredoo QSC has mandated DBS Bank, Deutsche Bank, HSBC, QInvest and QNB Capital to act as joint lead managers and Bookrunners for a proposed US dollar Reg S benchmark Sukuk offering. The offering is expected to be launched, subject to market conditions, following investor roadshows starting 22 November covering Asia, Middle East and Europe.
HSBC and NCB Capital announced the completion of the largest ever government guaranteed sukuk in Saudi Arabia for the General Authority of Civil Aviation (GACA). Totaling SR15.211 billion ($4.056 billion), the sukuk achieved a profit rate of 3.21 percent p.a. HSBC and NCB Capital acted as joint lead managers and bookrunners of the sukuk. Additionally, HSBC acted as the sukuk coordinator, sole Shariah coordinator, and agent of sukuk holders and payment administration. Standard Chartered Saudi Arabia was co-lead manager for the issuance. The deal was 1.9 times oversubscribed with strong demand from a wide range of investors. Additionally, this issuance is also approved by the Saudi Arabian Monetary Agency (SAMA) to be eligible for repo arrangements and has also been assigned zero percent risk weighting for capital adequacy calculation purpose.
Turkey mandated banks for its second sovereign sukuk issue in international markets and will hold a series of investor meetings in the Middle East and Asia. HSBC, QInvest and Standard Chartered have been mandated to explore opportunities for a possible lease certificate issuance in the international capital markets. Turkey has borrowed $4.2 billion from international capital markets so far this year and plans to borrow a total of up to $6.5 billion through a mix of Eurobond, Samurai and sukuk issues by the end of the year.
The UK government's national savings scheme, NEST, recently announced that HSBC was its choice of fund manager for its Sharia investment mandate. Chris Gower, head of European consultant relations at HSBC, said the fund follows a quantitative passive method. What is unusual it that the fund can have no exposure to financials. This practice leads to the Islamic index being overweight in the oil and gas sector and the healthcare sector. In terms of expectations of the fund Gower explains that HSBC works with a large number of UK defined contribution (DC) pension schemes. It opens up an investment universe to investors who would maybe otherwise not have the possibility to save for their retirement. Gower says the fund is looking forward to working together with NEST.
HSBC reported profits before tax of US$8.4 billion for its global business during the first quarter, a 95 per cent increase on the amount generated during the corresponding period a year earlier. HSBC Middle East, the bank's regional arm, reported profits before tax of $524 million for the first quarter, a 57.8 per cent increase compared with a year earlier, as it released provisions earlier made for bad debts. Meanwhile, Abu Dhabi Islamic Bank reported net profit at group level of Dh340.1m for the first quarter, an increase of 10.6 per cent compared with a year earlier. ADIB reported 5.4 per cent growth in net customer financing assets during the quarter to Dh54bn. At the same time, the bank's provisions and charges for bad debts were flat compared with a year ago at Dh185.5m.
According to HSBC, global Islamic bond sales are set to surpass sales from 2012 by 64%. Mohammed Dawood, Dubai-based MD of debt capital markets at HSBC Amanah, says that sales in the six-nation GCC will surge to between $30bn and $35bn this year. The Dubai government kicked off sovereign sukuk sales last month with $750m of 10-year Islamic notes after its borrowing costs fell 40%. Standard and Poor’s estimates show that Islamic financial assets will double by 2015 to $3-trillion.
CIMB Group Holdings Bhd received its underwriting for global and local sukuk issuance fall in 2012. Meanwhile, the market share of HSBC Bank plc grew significantly during the same period. The total issuance for global sukuk of CIMB fell from US$7.77 billion in 2011 to US$6.21 billion (RM18.82 billion). As a result, its ranking dropped to second place and its market share eased to 12% from 17.7% in 2012. HSBC reached first place with total global issuance increasing to US$11.35 billion from US$4.88 billion in 2011. Its market share rosealmost double to 21.9% from 11.1% in 2011.