Middle East Bonds

The dollar sukuk market is on course for a photo finish with 2012’s record volume, with flydubai pushing forward plans for a debut deal and market participants suggesting volatile macroeconomic conditions have added impetus for another prospective borrower, Turkey.

A grim secondary performance by Goldman Sachs’s debut sukuk has turned the deal into a ready weapon for anyone holding that the Islamic market is not ready for such non-halal borrowers. But despite the performance, Goldman's sukuk will be remembered as the issue that shook the market purists' defences.

Hopes have been fading that the sukuk market will see a record level of dollar issuance in 2014, with bankers suggesting that there may be only two or three more international deals to print before the end of December. But with Flydubai setting its sights on an earlier debut launch than previously expected, the year could still be on for a photo finish with 2012.

Flydubai has set its sights on issuing a dollar benchmark deal before the end of November, having pushed forward the six month timetable that bankers close to the deal recently outlined. But like many prospective borrowers, it will hope that Wednesday’s volatile markets are not a lasting feature in the run up to year end.

A grim secondary performance by Goldman Sachs’ debut sukuk has made it a soft target for anyone who holds that the Islamic market is not ready for such non-halal borrowers. But despite the performance, Goldman's sukuk will be remembered as the issuer which debunked the market purists' defences

The Central Bank of Bahrain has received a 385% oversubscribed order book for its latest BD20m monthly sukuk al ijara sale.

Hopes are fading that the sukuk market will see a record level of dollar issuance in 2014, with bankers suggesting that there may be only two or three more international deals to print before the end of December. But, depending on improving market stability, the year could still be on for a photo finish with 2012.

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.