After a quiet start to 2015, Sukuk market activity picked up this week a short-term issuance from Bahrain and the IILM.
The International Islamic Liquidity Management (IILM) has successfully reissued USD990 million benchmark size short-term Sukuk.
The International Islamic Financial Market (IIFM) believes the global sukuk market will be able to sustain its expansionary phase into 2015 with total issuance likely to top the US$150 billion (RM525 billion) despite the uncertainty in the global economy.
IIFM CEO Ijlal A Alvi said the forecast is based on pipeline of issues planned and expectations of sustained demand for funds from existing Islamic financial centres and potential issuers of Shariah-based bonds from a variety of countries such as Mexico, Indonesia, Kenya and Turkey as Islamic finance gains more mainstream acceptance.
The Malaysia-based International Islamic Liquidity Management Corp (IILM) has added Qatar's Barwa Bank IPO-BABK.QA as the tenth primary dealer handling its Islamic bond programme, the organisation said on Monday.
The IILM, a consortium of central banks from Asia, the Middle East and Africa, launched the programme last year to meet a shortage of investment-grade financial instruments which Islamic banks can use for their short-term funding needs.
The Malaysia-based International Islamic Liquidity Management Corp (IILM) lengthened maturities in its Islamic bond programme on Monday by auctioning $400 million of six-month sukuk, its first sale of that tenor.
The IILM, a consortium of central banks from Asia, the Middle East and Africa, began the programme last year to address a shortage of instruments Islamic banks can use to manage short-term liquidity. Previously, it had only issued three-month paper.
Persian Gulf government spending will help drive what may be a record year for Islamic bond sales,Fitch Ratings said, echoing HSBC Holdings Plc (HSBA) forecasts.
Sales will probably match the 2012 high, the rating company said in a note last week even amid the slowest start to issuance since 2010. Mohammed Dawood, global head of sukuk financing at HSBC, said last month that sales will rebound from a decline last year. Borrowers sold $133 million of syndicated sukuk to Jan. 19, the least since $47 million in the same period four years ago, according to data compiled by Bloomberg.
The Malaysia-based International Islamic Liquidity Management Corp expanded its sukuk issuance programme on Monday by auctioning $860 million of three-month Islamic bonds at a yield of 0.55635 percent.
The issue brings the total amount of the IILM's outstanding sukuk to $1.35 billion, the body said in a statement.
The IILM, owned by a consortium of central banks from Asia, the Middle East and Africa, is seeking to help Islamic banks manage their short-term funding needs by easing their shortage of liquid, investment-grade financial instruments.
The Malaysia-based International Islamic Liquidity Management Corp (IILM) said it had expanded the number of primary dealers handling its Islamic bond programme to nine from seven, a step towards expanding cross-border trade in its sukuk.
In August the IILM, a consortium of central banks from Asia, the Middle East and Africa, conducted its first sukuk issue, selling $490 million of three-month paper.
The big surge happening in the global Islamic finance sector is expected to benefit Dubai as it pitches to become a global Islamic financial hub, analysts said. “Global Islamic Finance is expected to maintain its rapid pace of growth, strengthening itself as a real alternative to conventional finance,” said Stuart Anderson, Managing Director & Regional Head, Middle East at Standard & Poor’s.
Primary dealers of the International Islamic Liquidity Management Corp (IILM) said that after enjoying healthy demand for its recent debut Islamic bond, efforts were shifting to expand the distribution network of buyers.
The US$490 million, three-month sukuk was auctioned to seven primary dealer banks, as the IILM aims to address a shortage of financial instruments for Islamic banks to manage their short-term funding needs.
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.