Sukuk: Pinpointing the Next Wave of Mega Deals

Dubai, UAE: Industry experts predict Sukuk issuance will reach $100 billion in the next five years. According to recent statistics, Islamic Sukuk issuance in the Gulf and other Arab countries had reached $14 billion by the first quarter of 2006. The growth and development of the Sukuk industry will be under discussion at the World Islamic Funds & Capital Markets Conference. The third edition of the annual conference will bring together Investors, Fund Managers and International Financial Institutions at the Gulf International Convention Centre in the Kingdom of Bahrain from the 26th to 28th of May.

While it has registered an average growth rate of almost 45 per cent during 2001-2005 in the Middle East, Sukuk represents a significant new development in global capital markets as one of the fastest growing sectors in Islamic finance. As per market reports, the Islamic finance market has grown over the last decade by more than 20 per cent per year, while as of February 2007; it is estimated to be worth from $200 billion to $400 billion worldwide.

Sovereign and corporate Sukuk issuance has developed phenomenally over the last two years with Japan on the verge of issuing its debut sovereign Sukuk. The recent acquisition of UK shipping giant, P&O by Dubai Ports, Customs & Free Zone Corporation, for instance, was largely financed through the issuance of a US$3.5bn Sukuk, structured in Dubai. And finally, Kuwait’s Investment Dar and Adeem Investment Co has bought a stake in the prestige can manufacturer Aston Martin using Sukuk.

Ahmed Abbas, Chief Executive Officer of Liquidity Management Centre commented:
“The very arrival and commitment of the big players like Citibank, Deutsche Bank, HSBC etc. is proof of the potential of Sukuk and its spectacular growth. These are players who are involved in the business purely for the sake of issuances and not for any kind of short term gains”.

The top major players in the market on the criteria of size are Dubai Islamic Bank and Barclays Capital, while Liquidity Management Centre tops the list on the basis of the number of Sukuks issued.

The World Islamic Funds & Capital Markets Conference will feature a dedicated session focused on The Global Sukuk Market – The Landscape & Outlook for More Mega Deals where Shamsun Hussain, Director & Head: Debt Market, CIMB Islamic will make a presentation and Ahmed Abbas, Chief Executive Officer, Liquidity Management Centre & Harris Irfan, Director: Global Markets, Deutsche Bank will discuss the next wave and assess the future trends in Sukuk structures.

The conference has attracted the support of Investment Dar, Bahrain Islamic Bank, BankMuscat International and Adeem Investment as Platinum Strategic Partners.

Yousif Saleh Khalaf, CEO of Bahrain Islamic Bank said: “We are delighted to be Platinum Partners of the 3rd Annual World Islamic Funds & Capital Markets Conference at this exciting time in the development of Islamic capital markets.”

BIsB has established leadership in the application of Islamic modes of investment and financing and excelled in the provision of a diversified range of products and services for retail customers, commercial businesses and financial institutions. It was established in 1979 as the first Islamic commercial bank in the Kingdom of Bahrain, and ever since it experienced a remarkable growth. Its shareholders’ equity amounted to around BD75 million and its total assets exceeded BD436 million as at 31st December, 2006.

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