Middle East Bonds

Israel Electric returned to its recent dual tranche dollar deal on Tuesday. The $300m increase hit a narrow window before US holidays and non-farm payroll data, and avoided a weak Wednesday opening.

International investors watched Egypt this week with a mixture of anxiety and hope ahead of scheduled mass protests on Sunday, June 30, which could damage president Mohammed Morsi. The Tamarod movement has the potential to further destabilise the country, but may also help break the post-revolution political paralysis that has blighted its economy.

Abu Dhabi's Ruwais Power Co. has picked banks for a series of investor meetings and could launch a debut bond deal later in the year.

Oman’s Tilal Development, owner of the Muscat Grand Mall and part of Al Madina Real Estate, has received approval from the Capital Markets Authority (CMA) for a five-year OR50m ($130m) ijara sukuk.

The African Development Bank (AfDB) has signed a memorandum of understanding (MoU) with the Islamic Liquidity Management Corporation (IILM) in a bid to broaden its funding base.

Wednesday’s confirmation by the chairman of the US Federal Reserve, Ben Bernanke, of his intention to begin reducing quantitative easing this year if economic conditions allow have all but killed off any remaining prospects of international dollar sukuk issuance before Ramadan, say Gulf-based investors. But it could also lead to the return of shorter-dated floating rate sukuk at the expense of long-tenor fixed rate instruments, writes Dan Alderson.

Another surge of volatility shattered emerging market bond bankers’ hopes for a round of fresh supply this week. But as rising US Treasury rates throw the market into turmoil, syndicate officials are staying stoic. Investor appetite for the right names is still strong, and some stability next week is all issuers need to bring benchmarks, they said.

Wednesday’s confirmation by the chairman of the US Federal Reserve, Ben Bernanke, of his intention to begin reducing quantitative easing this year if economic conditions allow have all but killed off any remaining prospects of international dollar sukuk issuance before Ramadan, say Gulf-based investors. But it could also lead to the return of shorter-dated floating rate sukuk at the expense of long-tenor fixed rate instruments, writes Dan Alderson.

Israel Electric braved an uncertain market to launch a dual tranche dollar deal this week, but it managed to print a solid trade on Tuesday afternoon in spite of market uncertainty ahead of the US Federal Open Market Committee meeting on Wednesday.

Emerging market bond bankers hope Wednesday's US Federal Open Market Committee meeting will calm the market and offer issuers a window. Israel Electric has already proved successful deals can get done, and there are plenty of borrowers waiting for their chance.

The Central Bank of Bahrain sold BD20m ($53.2m) of short-term sukuk al ijara in its monthly sale, which was oversubscribed by 35%.

The international sukuk market remains open for business despite a lull in new issuance and the big recent sell off in emerging market bonds, say investors.