Middle East Bonds

The possible resolution of a dispute over Ian’s nuclear programme next month could trigger a surge in interest by global investors in a country that has been off limits for many years.

A grim secondary performance by Goldman Sachs’s debut sukuk has made it a soft target for anyone who holds that the Islamic market is just not ready for such non-halal borrowers. But far from illustrating that thesis, Goldman will be remembered – not least by conventional borrowers – as the bright spark which debunked the market’s defences and blew the door open for all and sundry to follow.

The International Islamic Liquidity Management Corp (IILM) plans to re-issue $860m of short-dated, commercial paper style sukuk on Monday.

The Islamic Corporation for the Development of the Private Sector (ICD) has signed an agreement with the Japan International Cooperation Agency (JICA) to support Islamic money markets and international capital markets in their countries of common interest.

Goldman Sachs’ sukuk has provided a useful lesson for other conventional borrowers looking at the asset class. Opinions are divided on the merits of non-Islamic borrowers testing the market, but bankers both close to and away from the deal agree that a wider distribution would be better for future debuts.

Goldman Sachs’ sukuk has provided a useful lesson for other conventional borrowers looking at the asset class. Opinions are divided on the merits of non-Islamic borrowers testing the market, but bankers both close to and away from the deal agree that a wider distribution would be better for future debuts.

Raising one’s game from regional bank to global is a risky strategy at the best of times, so for National Bank of Abu Dhabi to attempt the move when other firms are retrenching is is bound to draw some scepticism.

Recent Middle East financial bond issues have had mixed fortunes in the secondary market, but Goldman Sachs’s debut sukuk has notably underperformed since its mid-September pricing – with some investors and bankers away from the deal suggesting that this resulted both from exaggerated orders and from a persistent uneasiness the market has with borrowers it considers "un-Islamic”.

Recent Middle East financial bond issues have had mixed fortunes in the secondary market, but Goldman Sachs’s debut sukuk has notably underperformed since its mid-September pricing – with some investors and bankers away from the deal suggesting that this resulted both from exaggerated orders and from a persistent uneasiness the market has with borrowers it considers un-Islamic”.

Raising one’s game from regional bank to global is a risky strategy at the best of times, so for National Bank of Abu Dhabi to attempt the move when other firms are retrenching and streamlining their businesses is bound to draw some scepticism.

Raising one’s game from regional bank to global is a risky strategy at the best of times, so for National Bank of Abu Dhabi to attempt the move when other firms are retrenching and streamlining their businesses is bound to draw some scepticism.

Luxembourg’s debut in the sukuk market last week was a great advert for the asset class and rounded off a run of ground-breaking deals from new borrowers. But despite bankers reporting interest from other European sovereigns in the aftermath – and suggestions the Grand Duchy itself will return next year – it is unlikely that its western neighbours will follow soon.