Standard & Poor’s Ratings Services

GCC Islamic finance prospects bright

The GCC Islamic Finance industry is expected to maintain its rapid growth over the coming years despite mixed results across sectors in 2014.
The industry’s expansion is expected to be driven by the GCC’s robust economic prospects, continued infrastructure needs and rising issuance from governments and government-related entities.

Islamic Finance Forging Ahead Despite Contrasting Fortunes

Global Islamic Finance is expected to maintain its rapid pace of growth, strengthening its credibility as a real alternative to conventional finance. However, structural problems continue to limit its potential while its growth has made the industry more sensitive to global economic fluctuations. The contrasting fortunes shaping Islamic Finance will be the subject of a conference to be hosted by S&P in Dubai on 2 October, 2013. Prospects for the Sukuk sector will be one of the key focuses of the Conference. Another major theme is the widening sovereign adoption of Islamic Finance instruments. S&P analysts from across the Middle East, Africa, Europe and North America and a panel of senior Islamic Finance industry participants will speak at the S&P Islamic Finance Conference.

BB for Turkey Sukuk

Standard & Poor’s has rated Turkey's debut $1.5bn Sukuk lease certificates that fall due in 2018 'BB'. The issuance of the Ijarah certificates will be conducted by Hazine Mustesarligi Varlik Kiralama Anonim Sirketi. The assets underlying the lease consist of buildings and land owned by the country. The transaction further allows the state to sells a pool of property assets to the issuer.

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GCC and Asia likely to use sukuk funding

Recently a number of GCC companies issued landmark corporate and infrastructure sukuk in Malaysian ringgit. According to a report by Standard & Poor’s Ratings Services, this might be a sign of a starting trend of development and globalization of the market. Islamic financial instruments are becoming more popular since conventional banks worldwide offer fewer and shorter loans. Especially for countries of GCC and Asia, Islamic financial instruments will very probably become a key funding source.

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