GLOBAL Islamic bond sales are set to surpass 2012’s record as Persian
Gulf issuers take the lead to tap borrowing costs that tumbled in the
past year, according to HSBC, last year’s top sukuk underwriter.
Sales in the six-nation Gulf Co-operation Council (GCC) will surge to between $30bn and $35bn this year, says Mohammed Dawood, Dubai-based MD of debt capital markets at HSBC Amanah.
That is up as much as 64% from last year. The Dubai government kicked off sovereign sukuk sales last month with $750m of 10-year Islamic notes after its borrowing costs fell 40%.
"We will see a number of new issuers in the region who have now actually taken a hard look at this and said, ‘Okay look this makes a lot of sense for us,’" Mr Dawood says. "Not only can we get the size, can we get the tenure, but potentially from a pricing perspective, there is a real cost saving and cost benefit."
Sukuk sales more than doubled between 2010 and 2012 to $46bn as issuers sought to tap the wealth of Muslim investors who prefer returns complying with the religion’s ban on interest. Islamic financial assets will double by 2015 to as much as $3-trillion, Standard and Poor’s estimates show. While sales are off to a slower start this year, governments and firms from Turkey, Indonesia, Australia and Hong Kong may help to spur worldwide issuance to $55bn-$60bn, says HSBC Amanah Malaysia CEO Rafe Haneef.
The average yield on GCC sukuk fell 117 basis points, or 1.17 percentage points, in the past year to 3.04% on Friday, according to HSBC/Nasdaq Dubai’s GCC dollar sukuk index. Non-Islamic bonds from the Gulf yield 37 basis points more, HSBC/Nasdaq Dubai data show.
HSBC arranged 24% of the world’s 2012 Islamic bond sales, taking the top underwriter position from Kuala Lumpur-based CIMB Group Holdings, which held the spot for five years, according to data.
The London-based lender helped Turkey arrange $1.5bn of debt Islamic bonds in September. That sale "created its own momentum" and may spur "further activity at the government level and at the government-related enterprise level", Mr Dawood says. "There is a tremendous amount of interest among issuers to look at sukuk," he says. Turkey has the biggest economy in Eastern Europe and the Middle East, excluding Russia.
Malaysia, home to the world’s largest Islamic debt market, is also poised to witness growth this year and, along with the Asia Pacific region, will account for about half of global sales, Mr Haneef says.
"We will see an increased issuance but from a multitude of markets as opposed to just Malaysia and the Middle East," he says. "Five years ago, it was dominated by two centres: GCC and Malaysia. Now you are seeing Turkey, Indonesia, and hopefully others like Australia and Hong Kong will follow suit."
Still, sukuk sales globally are down 20% to $5.35bn so far this year, data compiled by Bloomberg show. By this time last year, Saudi Arabia’s civil aviation authority had raised $4bn for an airport in Jeddah, giving a boost to a year that also saw Qatar sell the same amount.
"Saudi will be an important driver of that just by virtue of its size," Mr Dawood says. "If the government now issues domestically, it will issue in sukuk format and that sends a very strong message out to many other entities that this is the way going forward."
Sukuk sales, which amounted to about 1% of the world’s $3.8-trillion of bond sales last year, may also be affected if there is "a broader weakening across the board in the fixed-income market," Mr Dawood says.
The average yield on GCC corporate sukuk rose the most in 14 months last month, after a four-year rally eroded returns. Emerging-market equities would offer better returns than bonds this year, Royal Bank of Scotland’s wealth management unit, Coutts & Company, said last week.
"That may be a sort of dark cloud which hangs over and perhaps will not help the market reach the overall targeted levels," Mr Dawood says.
Still, borrowing costs have begun to fall again, with the yield on Dubai’s 6.396% notes due next year posting its first weekly drop in four last week. The yield was down 290 basis points in the past year and at 2.23% in Dubai yesterday, and the spread between the notes and Malaysia’s 3.928% sukuk due June 2015 narrowed to 80 basis points from 268 last year.
The drop in costs enticed Dubai to sell its first 30-year debt last month. While those notes were non-Islamic, some issuers could opt for longer tenures this year, including "potentially" 30-year sukuk, to tap appetite of investors searching for higher yields, Mr Dawood says.
"You’ve got issuers who like low rates for long-term funding, and you’ve got investors who also now want to look at long term because that’s where there is greater yield," he says.
Source: http://www.bdlive.co.za/world/2013/02/12/news-analysis-hsbc-expects-islamic-bond-market-sales-will-surpass-record.html
Sales in the six-nation Gulf Co-operation Council (GCC) will surge to between $30bn and $35bn this year, says Mohammed Dawood, Dubai-based MD of debt capital markets at HSBC Amanah.
That is up as much as 64% from last year. The Dubai government kicked off sovereign sukuk sales last month with $750m of 10-year Islamic notes after its borrowing costs fell 40%.
"We will see a number of new issuers in the region who have now actually taken a hard look at this and said, ‘Okay look this makes a lot of sense for us,’" Mr Dawood says. "Not only can we get the size, can we get the tenure, but potentially from a pricing perspective, there is a real cost saving and cost benefit."
Sukuk sales more than doubled between 2010 and 2012 to $46bn as issuers sought to tap the wealth of Muslim investors who prefer returns complying with the religion’s ban on interest. Islamic financial assets will double by 2015 to as much as $3-trillion, Standard and Poor’s estimates show. While sales are off to a slower start this year, governments and firms from Turkey, Indonesia, Australia and Hong Kong may help to spur worldwide issuance to $55bn-$60bn, says HSBC Amanah Malaysia CEO Rafe Haneef.
The average yield on GCC sukuk fell 117 basis points, or 1.17 percentage points, in the past year to 3.04% on Friday, according to HSBC/Nasdaq Dubai’s GCC dollar sukuk index. Non-Islamic bonds from the Gulf yield 37 basis points more, HSBC/Nasdaq Dubai data show.
HSBC arranged 24% of the world’s 2012 Islamic bond sales, taking the top underwriter position from Kuala Lumpur-based CIMB Group Holdings, which held the spot for five years, according to data.
The London-based lender helped Turkey arrange $1.5bn of debt Islamic bonds in September. That sale "created its own momentum" and may spur "further activity at the government level and at the government-related enterprise level", Mr Dawood says. "There is a tremendous amount of interest among issuers to look at sukuk," he says. Turkey has the biggest economy in Eastern Europe and the Middle East, excluding Russia.
Malaysia, home to the world’s largest Islamic debt market, is also poised to witness growth this year and, along with the Asia Pacific region, will account for about half of global sales, Mr Haneef says.
"We will see an increased issuance but from a multitude of markets as opposed to just Malaysia and the Middle East," he says. "Five years ago, it was dominated by two centres: GCC and Malaysia. Now you are seeing Turkey, Indonesia, and hopefully others like Australia and Hong Kong will follow suit."
Still, sukuk sales globally are down 20% to $5.35bn so far this year, data compiled by Bloomberg show. By this time last year, Saudi Arabia’s civil aviation authority had raised $4bn for an airport in Jeddah, giving a boost to a year that also saw Qatar sell the same amount.
"Saudi will be an important driver of that just by virtue of its size," Mr Dawood says. "If the government now issues domestically, it will issue in sukuk format and that sends a very strong message out to many other entities that this is the way going forward."
Sukuk sales, which amounted to about 1% of the world’s $3.8-trillion of bond sales last year, may also be affected if there is "a broader weakening across the board in the fixed-income market," Mr Dawood says.
The average yield on GCC corporate sukuk rose the most in 14 months last month, after a four-year rally eroded returns. Emerging-market equities would offer better returns than bonds this year, Royal Bank of Scotland’s wealth management unit, Coutts & Company, said last week.
"That may be a sort of dark cloud which hangs over and perhaps will not help the market reach the overall targeted levels," Mr Dawood says.
Still, borrowing costs have begun to fall again, with the yield on Dubai’s 6.396% notes due next year posting its first weekly drop in four last week. The yield was down 290 basis points in the past year and at 2.23% in Dubai yesterday, and the spread between the notes and Malaysia’s 3.928% sukuk due June 2015 narrowed to 80 basis points from 268 last year.
The drop in costs enticed Dubai to sell its first 30-year debt last month. While those notes were non-Islamic, some issuers could opt for longer tenures this year, including "potentially" 30-year sukuk, to tap appetite of investors searching for higher yields, Mr Dawood says.
"You’ve got issuers who like low rates for long-term funding, and you’ve got investors who also now want to look at long term because that’s where there is greater yield," he says.
Source: http://www.bdlive.co.za/world/2013/02/12/news-analysis-hsbc-expects-islamic-bond-market-sales-will-surpass-record.html
Tidak ada komentar:
Posting Komentar