DUBAI: Average yields on Islamic bonds has encouraged borrowers to announce plans to sell more than $11 billion in sukuk since the start of this quarter.
Average rates on Shariah-compliant debt declined 73 basis points this year to 4.01 per cent yesterday, and reached 3.99 per cent on May 24, the lowest level since May 2005, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows.
Nakheel, the developer of palm-shaped islands off Dubai s coast, Malaysia s government and Qatar Islamic Bank SAQ are planning to sell Islamic bonds, according to data compiled by Bloomberg.
We re already seeing the floodgates open up, Zeid Ayer, who helps oversee $1.6 billion as fund manager at CIMB-Principal Islamic Asset Management Bhd. in Kuala Lumpur, said in a May 25 interview.
With yields low, we can expect more issuance. It s about time issuers came out and took advantage of the low funding rates. Sales of sukuk climbed 20 per cent to $7.4 billion this year, spurred by government spending on roads, rail and power plants in Malaysia, Indonesia, Qatar and Saudi Arabia. The Gulf is dominating the planned issuance after companies arranged to restructure debt with creditors.