KUWAIT, June 9 (KUNA) -- Primary sukuk market continued growth momentum in
May despite fears of slowdown in international arena, bringing USD 12.1
billion worth of new sukuk issuances to total USD 55.8 billion for five months
this year, a report showed.
The report, issued by Kuwait Finance House (KHF) Sunday, said Malaysia
accounted for the largest share of sukuk market in May, or 64.4 percent of
issuance total, as compared to 58.4 percent during previous month.
The notable increase over previous months is a result of a slight increment
in central bank issuances and a slight decline of Middle East sukuk.
Saudi Arabia's sukuk amounted to USD 2.1 billion bringing the market share
to 17.5 percent for May, said the report.
It added that total issuances from Saudi Arabia in 2013 reached USD 7.1
billion at the end of May, while issuances from UAE totalled USD 5.2 billion.
There were two corporate issuances from Turkey during the month, amounting to
USD 700 million, or 5.8 percent of total issuance.
Notable issuances during May include USD one billion Islamic Development
Bank (IDB) sukuk Wakalah Bel-Istithmar, issued with a five-year tenure, said
the report. The sukuk was priced at 1.535 percent and attracted orders worth
USD 1.5 billion.
Other notable issuances include 10-year tier II capital sukuk by Albaraka
Turk, which was the first sukuk Murabahah transaction issued in the
international capital markets from Turkey.
Competing participation bank Turkiye Finans also took the opportunity to
issue a USD 500 million sukuk priced at 3.95 percent. Orders came in at over
USD 1.9 billion for the paper.
Sovereign issuers made up 64.5 percent of the primary market in May, while
government related entities accounted for 1.9 percent and corporates took the
remaining 29.6 percent.
Malaysian ringgit accounted for 64.4 percent of issuances during the month.
The six USD issuances amounted to USD three billion in May, accounting for 24.
9 percent of the market.
The report highlighted that a total of 95 sukuk were issued in May against
40 sukuk in April and 64 in March. Among these, 59 were issued by corporate
sector totalling USD 3.6 billion, 32 by sovereigns totalling USD 8.3 billion,
and four by government related entities worth USD 231.6 million.
The yield of the IDB's sukuk maturing in three years' time witnessed an
increase of 17.7 percent or 15.4 basis points in May to reach 1.025 percent.
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