Persian Gulf government spending will help drive what may be a record year for Islamic bond sales, Fitch Ratings said, echoing HSBC Holdings Plc (HSBA) forecasts, reports Bloomberg (Jan 20, 2014).
Sales will probably match the 2012 high, the rating company said
in a note last week even amid the slowest start to issuance since 2010.
Mohammed Dawood, global head of sukuk financing at HSBC, said last month that
sales will rebound from a decline last year.
Borrowers sold $133 million of syndicated sukuk to Jan. 19, the
least since $47 million in the same period four years ago, according to data
compiled by Bloomberg.
Economic growth in the oil-rich Gulf Cooperation Council
countries and possible debut Islamic debt sales from the U.K. and Hong Kong
will help the long-term outlook for sukuk sales, Fitch said. Qatar’s plans for
the 2022 soccer world cup, Dubai’s preparations for the Expo world fair in
2020, and Saudi Arabia and Abu Dhabi’s spending commitments should boost
issuance, according to the rating company.
The report quoted Rizwan Kanji, Dubai-based partner at King& Spalding LLP, as saying: “There has been preparation work done, issuers
just haven’t gone to market yet. Everyone is taking a breather after the record
close to last year. We expect an active, fruitful year.”
