April and May looked to be banner months for sukuk. Two deals, one from the Saudi Electricity Company (SEC) and the other, from Banque Saudi Fransi, the Saudi lender part-owned by Credit Agricole, marked two rare but popular US dollar denominated issues which were highly prized by investors. The benchmark deals helped underscore growing investor appetite for Islamic bonds.

Saudi Fransi, Saudi Arabia’s fifth largest bank, launched $750m five-year Islamic bond mid-month at par amid strong investor demand for the issue in mid-May. The issue is the bank’s first sukuk sale under a recently-established $2bn debt programme.

Morocco is considering a potential dollar-denominated international bond of up to $1 billion in September or October, a senior finance and economy ministry official said on Wednesday. 

“It would be our first issue in dollars and give us the opportunity to diversify,” said El Hassan Eddez, deputy director, treasury and external finance at the ministry's debt office. 

Malaysia’s efforts to become a global hub for Islamic finance by offering tax breaks is driving a record rally in foreign-currency sukuk, and arrangers say interest is increasing among local issuers. 

Standard Chartered Plc is in talks with about five companies to manage deals amounting to at least $1 billion, Leon Koay, the Kuala Lumpur-based head of global markets, said in a May 15 interview. The Bloomberg Malaysian Sukuk Ex-MYR Index, which includes notes of Khazanah National Bhd., is rising for a sixth quarter and has gained 9 percent since December 2010. 

South Africa has delayed its debut Islamic bond issue while the Treasury reviews tax and revenue rules to ensure they are aligned with Islamic-financing laws, Thuto Shomang, head of asset and liability management in the Treasury, said on Thursday.

“We took longer than we had anticipated,” Shomang said. “We are waiting until all the regulations that are needed are in place.”

Qatar, world’s biggest natural gas exporter, is planning to issue Islamic bonds “Sukuk” for the first time ever, as it has sent a request for proposals to banks and is close to mandating arrangers, report said on Wednesday.

“The sukuk is expected sometime in the second quarter, before the summer break”, the sources said.

Dubai Islamic Bank (DIB) has mandated five banks for an Islamic bond, or sukuk, due to be issued at the end of May, three sources familiar with the matter told Reuters on Tuesday. The lender has picked HSBC, National Bank of Abu Dhabi, Emirates NBD, Deutsche Bank and itself for the deal, the sources said, requesting anonymity.

One of the sources added the sukuk was likely to be a benchmark-sized, five-year issue. Benchmark usually means at least $500 million.

Bahrain plans to issue a sovereign bond by the summer, its central bank said on Tuesday, a sign that the Gulf country is confident it can draw international investors despite ongoing social unrest and budgetary pressures.

A year of clashes between protesters from the Shi'ite majority and security forces has weighed on the small non-OPEC oil exporter, eroding capital parked in its mutual funds, while fiscal handouts have raised the average oil price the kingdom needs to balance its budget to near-market levels.

The Turkish government will press ahead with its first issue of Islamic bonds this year and the planned sale should encourage private companies to do likewise and boost Istanbul's role as a financial centre, Deputy Prime Minister Ali Babacan said on Tuesday.

The government had said previously it could issue a sukuk in 2012, overcoming sensitivities about Islamic finance in the secular republic as it seeks to tap a rich pool of investors flush with oil money.

With an estimated value of around $1.1trn in global assets, Islamic finance has maintained continuous growth against the backdrop of global economic turmoil across many of the conventional world markets. Yet while their inherent conservatism and overweight exposure to low risk investment has proven a strong point for Islamic-compliant financing of real estate, as safer investments have generally out-performed the market, the ongoing lag in Shari’a rules harmonisation is threatening to stifle their full potential in the Middle East and Islamic Asia, reflects Mark Faithfull.

Oman’s economy is robust and expected to grow by 5 percent this year, the Gulf Arab country’s central bank head Hamood Sangour al-Zadjali said on Wednesday, adding that the country may issue sovereign debt of 200 million rials ($518 million). 

“The local economy is in an excellent condition. We expect growth of 5 percent this year. Inflation is under control, somewhere between 3.5 to 4 percent,” the sultanate’s top banker told Reuters on the sidelines of a banking conference.