Dato' Lee Kok Kwan, Chairman of BIX Malaysia, the Bond and Sukuk Information Exchange Malaysia, spoke with Bonds & Loans about the sukuk pipeline for the coming year, growing demand for Sharia-compliant instruments, and Malaysia’s innovative approach to Islamic finance.
As investors around the world brace for continued uncertainty in 2019 that will test the steeliest of nerves, the outlook for debt markets in the Gulf Co-operation Council (GCC) region is a much brighter one, with the potential for strong risk adjusted returns.
Leading UAE-based regional district cooling firm National Central Cooling Company PJSC – better known as Tabreed – launched its debut benchmark 7-year sukuk against the backdrop of an active deal pipeline and adverse market conditions, securing competitive pricing and an oversubscription rate of 1.5X. The funding team’s decision to prioritise speed-to-market, flexibility, and investor visibility by working with a leading global exchange like London Stock Exchange were central to the transaction’s resounding success.
Despite its reputation as a heavy emitter of greenhouse gasses, Indonesia’s green sukuk was hailed as a game changer for both Islamic and ESG investing. Luky Alfirman, Director General of Budget Financing and Risk Management, Ministry of Finance in Indonesia believes its inaugural transaction in February is the first of many to come as the government looks to double down on its commitment to climate change mitigation.
Mohammed Khnifer, Senior Associate, Debt Capital Markets at the Islamic Corporation for the Development of the Private Sector (ICD), spoke to Bonds & Loans about Saudi Arabia’s real estate sector, the upcoming inclusion of Saudi debt in the JP Morgan indices, and the development of regulation within the country.
The outlook for GCC credit remains buoyant through the remainder of the year despite a brief lull through the summer months. Still, deeper and more frequent questions about the structural challenges faced by many of the GCC economies suggest more uncertainty lies ahead in the longer term, according to bankers, borrowers, investors and economists who spoke with Bonds & Loans on a recent research trip to the region.
This year’s Bonds, Loans & Sukuk Middle East Awards saw no shortage of firsts as the regions borrowers and finance professionals pushed the boundaries of the possible through new structures and techniques in a range of transactions.
The Omani electricity company SPV placed the first ever corporate sukuk from the country with an elegant legal structure that helped navigate regulatory obstacles.
Dubai Aerospace Enterprise (DAE) has signed a landmark unsecured four-year dual-tranche revolving credit facility with an initial commitment of USD480mn and an accordion feature that allows the facility to be increased to up to USD800mn. The deal was one of the largest conventional/Islamic transactions in the region.
Hamid Butt, Head of Investment Banking at Noorbank sat down with Bonds & Loans at the Bonds, Loans & Sukuk 2018 conference in Dubai to talk about why sukuk is gaining mainstream acceptance from investors from outside the GCC.
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