New Middle East sukuk market hits $19bn in ’07

New Middle East sukuk market hits $19bn in ’07

The Middle East’s primary market for Islamic bonds is expected to close at $19bn in 2007 as further deals are delayed amid concerns over a weakening dollar, bankers say.

“It’s the year end, no issues are likely to hit the market now,” said Nader al-Salim, a banker at Citi Islamic Investment Bank.
As of December 10, new sukuks issued in the Middle East were close to $18.65bn, compared to a global market of $27bn, according to Zawya.com data.

Better global market conditions could boost the Mideast primary market by another $10bn in the first quarter of 2008 after some issues were delayed by the global liquidity crunch that affected debt markets in 2007, Geert Bossuyt, managing director and regional head of Middle East structuring at Deutsche Bank, said in November.

Dubai mortgage firm Amlak Finance plans to sell its delayed asset-backed Islamic bonds worth about $260mn to finance expansion.

UAE’s Ras Al Khaimah Properties could sell up to $2bn worth of sukuk to fund its real estate projects, whereas Kuwait’s Abyaar Real Estate Development Co plans a $1bn Islamic bond in 2008 to finance projects.

Qatar’s Barwa Real Estate Co had also lined up for an $800mn sukuk issue (but reduced it to $700mn due to what it said was “a lack of response in view of the global credit crunch”.

Doha Bank said it would raise close to $1bn by September 2008 to invest in green technology.

Kuwait’s Gulf Holding Company was to raise a ‘substantial’ amount in an Islamic bond issue to finance a $620mn real estate project in Bahrain.

Saudi Arabia’s Al Rajhi Cement Investment Co said it planned to sell $600mn of Islamic bonds by the end of February to finance construction of plants in Syria and Jordan.

Bahrain Islamic Bank was planning a $1bn acquisition next year and said it would finance most of the purchase by selling Islamic bonds.

Kuwait’s Al Ahlia Real Estate Projects Co, or Arepco’s sukuk issuance which was on a roadshow in November was still open, according to the lead arranger, Liquidity Management Center. The two-year sukuk is a pre-IPO equity-linked sukuk, with an 8% profit rate payable semiannually.

Qatar’s Salam Bounian Development Co is marketing its $150mn The Gate Sukuk. The musharaka bond has maturity of 10 years and can be called after five years. Qatar Islamic Bank, Qatar National Bank and Commercialbank are the arrangers.

Bahrain’s Albaraka Banking Group plans to sell up to $250mn Islamic bond in the first quarter of 2008 to fund its expansion plans. The bond will be dollar denominated and will be available to regional and international investors.

Among other reports doing the rounds were UAE-based National Central Cooling Company, or Tabreed, was said to be in advanced talks with banks to raise 1bn dirhams through bank funding and Islamic bonds to finance its expansion in the Gulf.