Africa Bonds

February saw a 14% fall in sukuk volume from the same period last year and a 28% decline from January. The month witnessed only 46 sukuk, compared to 78 sukuk in January, with a total value of $7.45bn.

The dollar sukuk market has seen three issues so far this year, with three great results capped off by the Islamic Development Bank boldly entering new territory with an unprecedented $1.5bn last Thursday. But while each of these deals has stirred Islamic finance professionals to proclaim the growing profile and pools of capital for the asset class, the market is yet to see a true test of demand.

South Africa and Luxembourg have stepped up their plans to issue sukuk as they look to be among the first non-Muslim majority sovereigns to hit the market this year.

South Africa and Luxembourg have stepped up their plans to issue sukuk as they look to be among the first non-Muslim majority sovereigns to hit the market this year.

The Republic of South Africa will issue a debut sukuk this year and is targeting up to $750m from the deal, a national treasury official said.

James Nelson is moving to be Standard Chartered Bank’s head of Africa DCM.

The sukuk market has started slowly in 2014, but IFIS data for announced deals suggests there is enough in the pipeline to surpass last year’s total issuance. High profile deals could come from both regular borrowers and those tapping the market for the first time.

The Republic of South Africa will “definitely” issue a debut sukuk this year and is targeting up to $750m from the deal, a national treasury official said on Wednesday.

The International Islamic Liquidity Management Corporation (IILM) has auctioned its third $490m short term dollar sukuk.

Despite Egypt’s rejection of political Islam last year, Islamic banking in the country is set to accelerate, say bankers. Seizing the opportunity to help those most affected by Egypt’s struggling economy will bring a doubling of Islamic banking assets over the next two years, they predict.

The burgeoning green bond sector took two important strides this week, as the European Investment Bank increased an outstanding deal to the largest volume on record and the African Development Bank entered the Scandinavian capital markets for the first time with its second ever green bond.

In 2014, emerging market bankers will be chasing after bigger mandates, but fewer of them if this year’s numbers are anything to go by. The average size of an emerging market bond in the first weeks of this year has leapt skywards compared to previous years while the number of deals priced has plummeted, according to Dealogic data. But DCM officials say they see little real change in the way deals are pitched or sold as a result of that new strategy.