Malaysia is the bond market leader in ASEAN and one of the largest in Asia with outstanding bonds totaling RM643.8 billion at Dec. 31, 2009. In that year, sukuk issuances in Malaysia totaled RM31.7 billion. Malaysia accounts for 47 percent of the sukuk issuances in the world.
The global sukuk market totals about $130 billion, with a growth rate of about 40 percent annually. Despite a challenging environment, new issuance of sukuk in the global sukuk market rose by 43 percent to $20 billion in 2009. However, the economic and financial developments in Europe and the US have resulted in a more cautious market, and the global sukuk issuance declined by 20 percent in the first half of 2010. But most observers are expecting the sukuk market to rebound in second half 2010, and already there are signs of this with the Cagamas/Al-Rajhi Bank ALIm Sukuk; the Malaysia Global Sukuk II; the Khazanah Singapore Dollar Issuance; the Kuveyt Turk Wakala Sukuk, etc.
Celcom Axiata Bhd in fact successfully closed in August 2010 a RM4.2 billion nominal value unrated sukuk through a private offering as part of an internal exercise to streamline the company's business functions and to establish a network-centric entity. According to Celcom, the sukuk was issued on its behalf by its wholly-owned subsidiary, Celcom Transmission (M) Sdn Bhd (CTX), and comprises tenures ranging from five to 10 years.
This internal exercise, stressed the company, is a component of its holding company, Axiata's groupwide initiative to transform its regional back-end operations to drive efficiencies, enhance cost savings and create value. Under the exercise, Celcom's telecommunication network business will be transferred to CTX, which will be responsible for the day-to-day operations and management of the network business moving forward, but adding value and closing technology-related gaps with tactical and strategic initiatives.
Celcom chief executive officer and director of CTX, Shazalli Ramly, said the company would continue to look for opportunities to improve costs and operational efficiencies. "Aside from having a differentiated sales and marketing strategy, we need to be equally focused and innovative on our network capabilities to drive financial performance. We believe this internal exercise to streamline Celcom's business operations would be a critical step in achieving such an objective," he explained at the sukuk launch.
Malaysia's Employees Provident Fund (EPF) will subscribe RM3.4 billion while the remaining RM800 million will be taken up equally by CIMB Islamic Bank and Malayan Banking Berhad (Maybank). CIMB Investment Bank and Maybank Investment Bank are the joint principal advisers, joint lead arrangers and joint lead managers for the sukuk issuance.
In early September 2010, BERNAS, a group of companies involved in the procurement and processing of paddy; as well as the importation, warehousing, distribution and marketing of rice in Malaysia, mandated Standard Chartered Saadiq and Bank Muamalat Malaysia Berhad to arrange its debut RM750 million Islamic Commercial Paper/Medium Term Notes (ICP/MTN) Program. The two banks are acting as principal advisers and lead arrangers and managers to the issuance.
According to Bakry Hamzah of Bernas, sukuk is an important alternative source of raising finance for long-term investment. The proceeds from the above sukuk will be used for working capital purposes and to finance Bernas's current and future investment program.
BERNAS currently controls about 24 percent of the paddy market and 45 percent of the local rice demand. To increase the Group's presence along the entire industry supply chain, BERNAS is now involved in seed and farming activities, international rice joint ventures, as well as rice complementary businesses.
By MUSHTAK PARKER | ARAB NEWS
Source : http://arabnews.com/economy/islamicfinance/article142385.ece - Sept 19, 2010
The global sukuk market totals about $130 billion, with a growth rate of about 40 percent annually. Despite a challenging environment, new issuance of sukuk in the global sukuk market rose by 43 percent to $20 billion in 2009. However, the economic and financial developments in Europe and the US have resulted in a more cautious market, and the global sukuk issuance declined by 20 percent in the first half of 2010. But most observers are expecting the sukuk market to rebound in second half 2010, and already there are signs of this with the Cagamas/Al-Rajhi Bank ALIm Sukuk; the Malaysia Global Sukuk II; the Khazanah Singapore Dollar Issuance; the Kuveyt Turk Wakala Sukuk, etc.
Celcom Axiata Bhd in fact successfully closed in August 2010 a RM4.2 billion nominal value unrated sukuk through a private offering as part of an internal exercise to streamline the company's business functions and to establish a network-centric entity. According to Celcom, the sukuk was issued on its behalf by its wholly-owned subsidiary, Celcom Transmission (M) Sdn Bhd (CTX), and comprises tenures ranging from five to 10 years.
This internal exercise, stressed the company, is a component of its holding company, Axiata's groupwide initiative to transform its regional back-end operations to drive efficiencies, enhance cost savings and create value. Under the exercise, Celcom's telecommunication network business will be transferred to CTX, which will be responsible for the day-to-day operations and management of the network business moving forward, but adding value and closing technology-related gaps with tactical and strategic initiatives.
Celcom chief executive officer and director of CTX, Shazalli Ramly, said the company would continue to look for opportunities to improve costs and operational efficiencies. "Aside from having a differentiated sales and marketing strategy, we need to be equally focused and innovative on our network capabilities to drive financial performance. We believe this internal exercise to streamline Celcom's business operations would be a critical step in achieving such an objective," he explained at the sukuk launch.
Malaysia's Employees Provident Fund (EPF) will subscribe RM3.4 billion while the remaining RM800 million will be taken up equally by CIMB Islamic Bank and Malayan Banking Berhad (Maybank). CIMB Investment Bank and Maybank Investment Bank are the joint principal advisers, joint lead arrangers and joint lead managers for the sukuk issuance.
In early September 2010, BERNAS, a group of companies involved in the procurement and processing of paddy; as well as the importation, warehousing, distribution and marketing of rice in Malaysia, mandated Standard Chartered Saadiq and Bank Muamalat Malaysia Berhad to arrange its debut RM750 million Islamic Commercial Paper/Medium Term Notes (ICP/MTN) Program. The two banks are acting as principal advisers and lead arrangers and managers to the issuance.
According to Bakry Hamzah of Bernas, sukuk is an important alternative source of raising finance for long-term investment. The proceeds from the above sukuk will be used for working capital purposes and to finance Bernas's current and future investment program.
BERNAS currently controls about 24 percent of the paddy market and 45 percent of the local rice demand. To increase the Group's presence along the entire industry supply chain, BERNAS is now involved in seed and farming activities, international rice joint ventures, as well as rice complementary businesses.
By MUSHTAK PARKER | ARAB NEWS
Source : http://arabnews.com/economy/islamicfinance/article142385.ece - Sept 19, 2010
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