Middle East Bonds

Predicting volume for sukuk can be more difficult than for emerging market bonds, given the sukuk market is still in a nascent stage and many issuers are coming to the asset class for the first time. It is widely expected, however, that dollar sukuk issuance will surpass this year’s figure in 2014.

Predicting volume for sukuk can be more difficult than for emerging market bonds, given the sukuk market is still in a nascent stage and many issuers are coming to the asset class for the first time. It is widely expected, however, that dollar sukuk issuance will surpass this year’s figure in 2014.

The UK government is in discussions with the Turkish treasury, among other countries, as it targets next financial year for its debut £200m sukuk.

Iran plans to issue up to €12.5bn of sukuk and contribution bonds in its coming year to finance projects, with the country’s oil ministry taking a €9bn share of the finances.

Qatar's central bank will issue QR1bn ($274.8m) of local currency sukuk and QR3bn of government bonds next week.

Kuwait Airways plans to issue sukuk or conventional bonds to help pay for 25 to 35 new planes.

The sukuk market is looking forward to a strong start to the new year as it brings 2013 to an end with a flourish. Three closely-watched deals on Tuesday brought more dollar issuance in a day than had been seen in the whole of the third quarter — and there's plenty more to come as two issuers could still come to market this year, while the first quarter pipeline is full of big names.

Qatari telecoms firm Ooredoo issued a $1.25bn debut five year sukuk on Tuesday at 3.039% or 160bp over mid-swaps — 5bp through initial price thoughts.

Aldar Properties saw big demand as it priced its $750m 4.348% five year sukuk on Tuesday at 290bp over mid-swaps — in from Monday’s initial price thoughts of very low 300bp area.

Aldar Properties’ $750m sukuk traded up in secondary markets after it was priced on Tuesday and was quoted at 100.15/100.25 on Thursday. Ooredoo’s $1.25bn note, also issued on Tuesday, dipped below par but recovered to around par on Thursday.

Global sukuk issuance is likely to maintain its positive long-term growth trends, said Moody’s this week, while S&P said the corporate and infrastructure sukuk pipeline will be “solid” in 2014.

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