Wednesday June 27, 2012
HSBC beats CIMB as sukuk sales head for record
KUALA LUMPUR: HSBC Bank Plc, which surpassed CIMB Group Holdings Bhd as the top Islamic bond arranger this year after dominating sales in the Persian Gulf, is predicting lower borrowing costs will drive record issuance in 2012.
Europe’s largest lender, the sole underwriter of Jeddah, Saudi Arabia-based General Authority of Civil Aviation’s US$4bil sukuk, handled 46 offerings worth US$7.2bil in 2012, a 35% market share, according to data compiled by Bloomberg.
Malayan Banking Bhd (Maybank), Malaysia’s biggest bank, ranks second spot with 10%, while CIMB Group is in third place with 9%.
Gulf issuers accounted for about 60% of global sales of US$20.5bil in 2012, and HSBC forecasts the year’s total worldwide will exceed the 2011 all-time high of US$36.7bil.
Companies were taking advantage of yields at a 10-month low to raise funds as governments increase spending to support their economies during the slowdown, HSBC said.
“The Saudi sukuk market has grown a lot this year and the growth momentum will continue to be strong,” Rafe Haneef, chief executive officer at HSBC Amanah Malaysia Bhd, the Islamic unit of HSBC, said in an interview. “Corporate issuers in the Middle East are tapping the market because prices have tightened.”
Saudi Arabia’s syariah-compliant bond market is the third-largest in the world after Malaysia and the United Arab Emirates, according to a June 21 report from the Deloitte Middle East Islamic Finance Centre based in Manama, Bahrain.
The sheikdom’s US$94bil of financial assets that complied with religious tenets accounted for 26% of the total in the six-member Gulf Cooperation Council and 8.2% globally, it said.
Sukuk sales in Malaysia are down in 2012 from the same period last year as potential issuers adopt a “wait-and-see attitude” until a date for national elections scheduled for 2013 is fixed, according to Badlisyah Abdul Ghani, chief executive officer at CIMB Islamic Bank Bhd, a unit of the country’s second-largest lender.
Issuance of syariah-compliant bonds in Malaysia dropped more than 9% to RM22.2bil this year, according to data compiled by Bloomberg. Sales reached a record RM75.6bil in 2011.
Maybank managed 66 Islamic bond deals this year amounting to US$2.1bil, data compiled by Bloomberg show. CIMB arranged 76 issues worth US$1.8bil.
“Based on the size of deals in the pipeline, sales in Malaysia will be sizeable and could surpass last year’s record if there’s certainty on the election date,” Badlisyah said. — Bloomberg