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The Islamic Financial Services Board (IFSB) has organised an IFSB Seminar on Islamic Capital Market themed Supporting Development through Sukuk: Prospects and Initiatives on 10 April 2016 in Cairo, Egypt. This Seminar was held as part of the IFSB Annual Meetings and Side Events 2016, hosted by the Central Bank of Egypt. Sherif S. Samy, Chairman of the Egyptian Financial Supervisory Authority, highlighted the importance of appropriate legal framework to support the issuance of Sukuk. He also emphasised the need for utilising Sukuk as a source of funding for social and infrastructure financing.

Khalid Al Aboudi, Chief Executive Officer of Islamic Corporation for the Development of the Private Sector (ICD), rang the market-opening bell to celebrate the listing of a 300 million US dollar Sukuk on Nasdaq Dubai. The total nominal value of Sukuk currently listed in Dubai has now reached $42.61 billion, more than the value listed in any other centre. The Islamic Development Bank (IDB) Group has seven other Sukuk currently outstanding on Nasdaq Dubai that have listed since 2014, with a total nominal value of $8.05 billion.

According to Fitch Ratings the total new Sukuk issuance (with a maturity of more than 18 months) in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was around US$11.1 billion (RM42.9 billion) in the first quarter of 2016. Fitch said that Sukuk issuance was up 22% from Q4’15 and 21% from a year earlier, while non-Sukuk bond issuance of US$17.1 billion was down 23% quarter-on-quarter and 45% year-on-year. Sukuk represented 39.3% of total bond and Sukuk issuance in these countries during the quarter – the highest proportion in the past eight years.

The Malaysian government, via special purpose entity Malaysia Sukuk Global Bhd, has successfully priced the 10-year and 30-year benchmark sukuk papers at 3.18 and 4.08 per cent. The new sukuk format uses non-physical assets to underpin the agency-based transaction wakala, instead of the traditional use of physical assets. Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said Malaysia has strengthened its position as a top investment destination.

Long-term sukuk issuance rose by 21 per cent year-on-year in the first quarter, as Gulf states with worsening fiscal balances tapped international bond markets. According to Fitch the GCC states – along with Mal­aysia, Indonesia, Turkey, Singapore and Pakistan – issued US$11.1 billion of sukuk in the first three months of the year. These countries issued 39.3 per cent of their debt as sukuk – the highest ratio of sukuk to conventional debt in eight years.

According to a deal lead Malaysia has launched a US$1.5bn dual-tranche sukuk. The transaction is split between a US$1bn 10-year tranche that has a profit rate of 135bp over Treasuries and a US$500m 30-year tranche at 145bp over Treasuries. Guidance of 150bp area over Treasuries and 165bp area over was released earlier on Wednesday. The transaction is conducted by CIMB, HSBC, JP Morgan and Maybank.

The Federation of Malaysia returned to the international bond markets on Wednesday with a $1.5 billion wakala sukuk. However, this success is overshadowed by 1MDB's $11 billion debt after one of its guarantors failed to make a $50 million interest payment on a $1.75 billion note that matures in 2022. It has now entered a grace period, which ends on April 25.

Malaysia may price its 10- and 30-year global Islamic bonds at 150 and 165 basis points over U.S. Treasuries. The data compiled by Bloomberg show that Malaysia’s existing sukuk maturing in 2025 yield 3.05 percent, while securities due in 2045 are paying 3.96 percent. According to Abu Dhabi’s sovereign wealth fund International Petroleum Investment 1MDB and Malaysia’s finance ministry are in credit-default, but the state firm’s President Arul Kanda said the company is in dispute with IPIC and he sees an amicable resolution.

The U.S. dollar-denominated Shariah compliant perpetual sukuk issuance is believed to be the first sukuk to be included within the Additional Tier 1 capital resources of a bank in the United States. Linklaters LLP has advised University Bank on its sukuk issuance in the United States. This is believed to be the first sukuk to be governed by the laws of the United States, in this case, the laws of the State of New York. The sukuk is limited to an annual profit rate of 5.75% and has no maturity date. University Bank, a subsidiary of University Bancorp Inc., is a community bank which specialises in Islamic banking and mortgage subservicing for the credit union industry.

Dubai Islamic Bank (DIB) has listed its latest sukuk worth $500 million on Nasdaq Dubai, bringing the bank’s total sukuk listings on the region’s international exchange to $3.25 billion. Following a total of seven sukuk listings this year by regional and international issuers, the total value of sukuk currently listed in Dubai has reached $42.61 billion, the largest amount of any listing centre in the world, underlining the rapid expansion of Dubai as a global capital of the Islamic Economy. Given the challenging market conditions, it was critical to have a strong credit come in and successfully close a deal, said Dr Adnan Chilwan, group CEO, DIB.

The value of sukuk being issued in the GCC has been falling, but there is still opportunity in the market, Zamir Iqbal, lead financial sector specialist at the World Bank said. The potential lies in the huge infrastructure financing, but a proper legal and tax environment for the structuring of the sukuk and the SPV laws must be established. There’s already excess liquidity in the market, and banks are looking for high-quality, highly-rated sukuk, Iqbal noted. The International Monetary Fund said in November that the GCC region was suffering from a lack of availability of Sharia'a compliant financial instruments, or tradable assets, leading to excess liquidity and to an uneven playing field for Islamic banks.

Oman’s market watchdog Capital Market Authority (CMA) has announced its new sukuk regulation, which includes stipulation on establishing a trustee structure and an LLC company as a special purpose vehicle for issuing sukuk. The regulation, which is effective from Wednesday, also allows structure of the sukuk subject to the approval of respective Sharia Supervisory Board issuer and the choice of the board is left to the issuer. The regulation made rating optional for the issuer and there is no restriction on the sukuk amount to be raised based on the company’s capital. The regulation will complement the existing bond regulatory framework.

Regulators of financial markets in the Gulf Cooperation Council (GCC) are urged to develop the infrastructure and regulatory framework in order to boost the sukuk market in the region, according to Zamir Iqbal, a World Bank expert. The sukuk market in the GCC presents ample opportunities, especially as governments are likely to resort to it for capital given the plunge in their revenues from lower oil prices, the lead financial sector specialist at the World Bank said. Iqbal added that the overall debt and capital market in the region needs to be strengthened with laws governing elements such as investor protection, and how to handle disputes and insolvency, among others.

Malaysia plans to sell as much as US$1.5 billion of global Islamic bonds, less than a month after Indonesia's sukuk attracted bids of more than three times the offered amount. The marketing of the notes started on Monday and they will likely have maturities of 10 and 30 years. The proceeds will be used to refinance US$1.2 billion of Shariah-compliant debt coming due in July. Malaysia's sale coincides with a rebound in the ringgit, which has rallied more than 10 per cent this year. A pick up in Brent crude is also brightening the outlook for the oil exporter's finances, just as sentiment is improving after an indebted state investment company sold off assets.

Islamic Corporation for the Development of the Private Sector (ICD) has launched a $300 million five-year sukuk that should price later on Wednesday. The transaction seems to have struggled to gain traction with investors, having initially been earmarked to price as early as Tuesday and sized as a benchmark offering. ICD has "retained a portion of the transaction", but no details were given. The issuer has also set pricing at the wide end of the 125-130 basis points over midswaps guide range given on the previous day. Noor Bank and Warba Bank have been added to the 10-strong group of banks arranging the transaction: Bank ABC, Boubyan Bank, CIMB, Dubai Islamic Bank, Emirates NBD, First Gulf Bank, HSBC, Mizuho, Societe Generale and Standard Chartered.

The relations between Malaysia and Japan is characterized by a special nature, not seen in any other countries in this region. The relations are underpinned by a strong bond, forged for a long time by a policy called the Look East policy. This Look East policy has worked as a lynch-pin between the two nations. Under this Look East policy, young people in Malaysia have been studying in Japan and this policy has brought back benefits through the brains and hands of those young people to help the Malaysian economy to invigorate. As Malaysia in an Islamic nation, Malaysia can open a gateway for Japanese investors to the markets of the Islamic nations. Some of the Japanese financial institutions have already started to issue Sukuk bonds.

Maple Leaf Cement Factory Limited (MLCFL) Monday paid Rs 8 billion Sukuk loan much earlier than scheduled. The company has been able to pay off much earlier than scheduled, its entire Sukuk loan of Rs 8 billion in the third quarter of the current financial year, said Muhammad Ashraf, MLCFL's company secretary, in a stock filing Monday. The payment, he said, was made against the agreed repayment schedule till December 2018. Improved profitability, better cash flow, cost curtailment initiatives and efficient financial discipline made it possible to repay the debt in advance.

The Iranian Ministry of Finance issued IRR 5 trillion of four-year lease-based Sukuk on 16 March. The bonds were sold through Iran Fara Bourse, Tehran’s over-the-counter market. The issue marks the first use by the Government of Iran of such bonds. Previously, in September 2015, another first had been notched up with the issuance of some $295 million in Islamic Treasury Bills on Iran Fara Bourse. Meanwhile, in banking, the State Bank of Pakistan called a special meeting of all banks/ financial institutions on 14 March 2016 to discuss progress made by the Pakistani banking sector for facilitating trade transactions with Iran. Later in March it was reported that Bank Melli Iran had expressed interest in opening a branch in Pakistan while Pakistan’s Habib Bank may open a branch in Iran.

Islamic bond sales are off to a racing start this year as Malaysia plans to tap the market following Indonesia’s $2.5bn issue, which was more than three times oversubscribed. Global sukuk offerings of $11.3bn are already 30% more than the first quarter of last year and are approaching the $12bn for the same period of 2014. Malaysia selected JPMorgan Chase & Co, CIMB Group Bhd, Malayan Banking Bhd and HSBC Holdings to arrange investor meetings for as early as the end of this week. Emerging-market dollar bonds are rallying this quarter after commodities rebounded and the Federal Reserve signalled a more gradual pace for US interest-rate increases.

In a statement to Qatar Stock Exchange on 30 March, it was revealed that Qatar International Islamic Bank (QIIB) is planning a Sukuk issue of up to QAR 3 billion. The bank’s General Assembly gave the nod to the extension of its approval to issue Additional Tier 1 Sukuk nonconvertible into ordinary shares of up to QAR 3 billion. The meeting delegated the bank’s board of directors' to decide the size of each issuance ,terms and conditions and issuance currency. QIIB CEO Abdulbasit A al-Shaibei was quoted as saying the Sukuk would be issued before the end of April to boost the bank’s capital ratio.