Islamic Development Bank (IDB), a Jeddah-based multilateral institution, plans to issue a benchmark-sized Islamic bond or sukuk in around May next year, the bank’s President Ahmad Mohamed Ali said on Wednesday.
In February, IDB, which has a top-notch AAA rating, priced a $1.5 billion, five-year sukuk, its largest ever Islamic bond.
The Islamic Development Bank (IDB) is currently the most highly rated institution in the Muslim world and among regional and international multilateral development banks.
This is substantiated by the fact that the three leading international rating agencies, Standard & Poor's, Moody's and Fitch Ratings, have all reaffirmed their credit rating of the bank for 2012 with a stable outlook.
A planned US$10 billion rolling programme of sukuk issues by the Islamic Development Bank (IDB) will be a major boost for Dubai’s ambitions to be a global hub of the Islamic economy, financial experts predict.
The IDB announced it had sought the approval of regulators at the Nasdaq Dubai stock exchange for the series of Sharia-compliant bond issues, which could begin trading over the next year. It would more than double the value of sukuk listed on Nasdaq Dubai so far this year.
Africa is for the first time embracing large-scale Islamic finance as countries seek to tap cash-rich Middle Eastern investors to finance their large infrastructure programmes.
The market for sukuk, or Islamic bonds, received a boost this month after Nigeria became the first major economy in sub-Saharan Africa to use the $100bn a year Islamic market, followed days later by Senegal.
The International Islamic Liquidity Management Corp has overcome regulatory and technical obstacles in issuing its first sukuk, but it faces a fresh challenge in ensuring that the paper becomes widely traded across borders.
The $490 million, three-month Islamic bond was auctioned to seven primary dealers from Asia, the Middle East abd Europe, the IILM said on Monday - a step towards creating an international market in Islamic financial instruments.
The Malaysia-based International Islamic Liquidity Management Corp (IILM) has reshuffled its sharia board, losing four of its original six members including senior Saudi and Qatari scholars, according to the body's website.
The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was founded in October 2010 to help develop cross-border markets in Islamic financial instruments.
Morocco has won backing from the Saudi-based Islamic Development Bank for its first sukuk as the North African country looks to attract Middle Eastern investors.
"The Islamic Development Bank has proposed us to buy our sukuk rather than offering us another loan," General Affairs minister Mohamed Najib Boulif said. "But the amount has not been set yet".
The Islamic Development Bank (IDB), a Jeddah-based multilateral institution, has called for the creation of a global sharia advisory board that can offer greater uniformity for the Islamic finance industry, its president said on Thursday.
A centralised format to the supervision of sharia-compliant banking products is gaining favour across the globe, as regulators seek to standardise industry practices and improve consumer perceptions.
International Islamic Liquidity Management Corp (IILM) faces a delicate task as it designs its maiden sukuk: it must make the issue attractive enough for investors to buy, but not so attractive that most of them buy to hold.
Whether it gets the balance right will affect the development of Islamic money market trading in the Gulf and South-East Asia over the coming year.
Over the last decade, trade between African countries and the rest of the world has grown significantly and, in particular, charting a 170% increase in trade with the GCC.
The ongoing shift by African countries from being aid-dependant to increasing trade and investment ties with the Middle East has positioned Islamic finance to play a key role in facilitating further increases in trade and investment flows between Africa and the Middle East.