sold $1 billion of sovereign Islamic bonds in its first-ever issue of the securities, attracting orders for 4.7 times the amount on offer.
The dollar-denominated five-year notes were priced at a 2.005 percent profit rate, according to a on the government’s website today. The U.K., which along with Hong Kong is rated the highest investment grade, sold sukuk for the first time in June at a coupon of 2.036 percent. Those notes yielded 1.75 percent today, data compiled by Bloomberg show.
A group that’s raised $4.5 billion for child vaccinations since its inception in 2006 plans to tap the Islamic debt market for the first time, kickstarting sales of ethical-based sukuk.
seeks to sell as much as $500 million of dollar-denominated Shariah-compliant notes, Michael Bennett, head of derivatives and structured finance at the World Bank’s treasury department, the intermediary for the sale, said in a Sept. 3 interview in Kuala Lumpur. IFFIM, a non-profit organization based in London, will sell the three-year vaccine bonds backed by commodities as early as this month, he said.
First-time sellers of bonds that adhere to Islam’s ban on interest are poised to revive an industry suffering its worst quarter in more than four years.
Luxembourg and Hong Kong aim to market debut offerings of sukuk next month, while , , and Tatarstan have announced plans for maiden issues. Islamic bond sales have fallen 82 percent to $2.6 billion this quarter compared with the previous three months, their lowest level since the first three months of 2010, according to data compiled by Bloomberg.
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.
The young generation have been encouraged to be involved in the Takaful industry as it provides a good income and promising future, despite beliefs to the contrary.
Takaful Ikhlas Bhd’s unit, Usrah Associates Group Agency Manager Samian Senin said by being a takaful agent, one can earn up to RM1 million annually after a decade in the industry.
“We achieved RM2.4 million as group contribution last year and recorded a 15 per cent growth year on year.
Malaysian banks' record sukuk issuance in 1H 2014 driven by rapid asset growth and Basel III Capital Needs
Moody's Investors Service says the record MYR3.25 billion ($1 billion) of ringgit-denominated sukuk issued by Malaysian Islamic banks in the first half of 2014 is driven by rapid asset growth, which in turn has led to significant funding and capital needs.
"We expect Malaysia's strong growth trends to continue, driven by strong demand from the predominantly Muslim population coupled with the government's comprehensive and coherent strategy to increase the proportion of Islamic financing to 40% of total domestic financing by 2020 from 24% at the end of May 2014," says Khalid Howladar, Moody's Global Head for Islamic Finance.
Asia presents huge developmental potential for Islamic finance and is likely to be the main driver of Islamic banking growth in the near future given the untapped potential in India, Bangladesh and Indonesia, according to a report. Islamic finance can be utilised for greater integration of financial markets with the real economy and for improvement of the economic balance between emerging and frontier markets, according to Kuwait Finance House Group report. Islamic banking is banking that is consistent with the principles of Sharia which prohibits acceptance of specific interest or fees for loans of money.
Islamic insurers, lagging behind the merger and acquisition (M&A) scenario, are likely to see some consolidation.
Over the last two years, M&As in the insurance sector have mainly involved conventional insurers, and analysts foresee some consolidation taking shape in the takaful sector in view of the Financial Services Act (FSA) and the Islamic Financial Services Act.
Sukuk sales by Malaysian lenders seeking to comply with Basel III rules are drawing strong demand, prompting arrangers to predict a rush of offers.
CIMB Islamic Bank Bhd, a unit of Malaysia’s second-biggest lender, has submitted a proposal to the Securities Commission for a RM5 billion (US$1.6 billion) programme, a person with knowledge of the deal who asked not to be identified because the information hasn’t been released, said yesterday. Public Islamic Bank Bhd received approval for a similar-sized programme, an April 23 stock exchange filing shows.
The recent decision by South Korea's central bank to join the Islamic Financial Services Board (IFSB), one of the main standard-setting bodies for Islamic finance, as well as Japan's Bank for International Cooperation’s proposal to issue ringgit sukuk shows a second wave of interest in Islamic Finance for the East Asian economic powerhouses.