KUALA LUMPUR: The US$2 billion (RM6 billion) of Islamic bonds
being sold in Indonesia and Saudi Arabia this month will push global
sukuk issuance above the total for 2010 as borrowing costs slide and
banks attract more deposits.
Indonesia will offer US$1 billion (RM3 billion) of syariah-compliant debt this quarter, Rahmat Waluyanto, director-general at the nation's debt-management office, said in an e-mail recently. (source)
Indonesia will offer US$1 billion (RM3 billion) of syariah-compliant debt this quarter, Rahmat Waluyanto, director-general at the nation's debt-management office, said in an e-mail recently. (source)
Saudi Aramco Total Refining & Petrochemical Co, a joint venture between Saudi Aramco Oil Co. and Paris-based Total SA, started selling US$1 billion of Islamic notes on September 10, according to a recent statement.
Investors may opt to take cash out of deposits to buy the notes because they will probably offer relatively higher yields, Datuk Mohamed Azahari Kamil, chief executive officer at Kuala Lumpur-based Asian Finance Bank Bhd, said in an interview yesterday. Average yields on sovereign Islamic bonds are trading 10 basis points off a record low, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index.
Global sales of sukuk climbed to US$16.9 billion (RM51.4 billion) in 2011, compared with US$10.5 billion (RM34 billion) in the same period of last year and US$17.6 billion (RM54 billion) in all of 2010, data compiled by Bloomberg show. Government sukuk yields fell six basis points, or 0.06 percentage point, this month to 3.48 per cent yesterday, after hitting an all-time low of 3.38 percent on August 4, the HSBC/ Nasdaq index shows.
Indonesia, home to the world's largest Muslim population, last sold dollar-denominated sukuk in 2009 and is seeking to issue more as part of its bid to bolster the country's syariah-compliant finance industry to 135 trillion rupiah or US$15.7 billion this year.
The sukuk sale from Indonesia, rated the highest non-investment grade of BB+ by Standard & Poor's, will be the country's second after it sold US$650 million (RM2 billion) of Islamic debt in April 2009.
The yield on Indonesia's 8.8 percent sukuk due in April 2014 has fallen 15 basis points this month to 2.51 per cent, prices from Royal Bank of Scotland Group plc show. The notes returned 3.7 per cent this year compared with the average 7.2 per cent on government sukuk globally.
Sales of sukuk by Malaysia rose to RM30.9 billion in 2010 from RM17.5 billion a year earlier, Bloomberg data show.
Deposits that comply with Muslim tenets in Malaysia grew 15 per cent to RM217 billion in 2010 and surpassed RM230 billion in July this year, central bank data show.
Sales of Islamic bonds from the six-member Gulf Cooperation Council rose to US$3.7 billion this year from US$2.5 billion in 2010, data show. - Bloomberg
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