Malaysia’s CIMB Group Holdings Bhd. aims to expand in the Persian Gulf by grabbing market share for arranging Islamic bonds from HSBC Holdings Plc and Standard Chartered Plc, the biggest underwriters in the region this year.
CIMB, which dominated global sukuk sales without managing any transactions in the Middle East in 2011, is seeking to form alliances in 2012, Badlisyah Abdul Ghani, chief executive officer of CIMB Islamic Bank Bhd, a unit of CIMB Group, said in a Nov. 29 interview. HSBC and Standard Chartered rank third and fifth for international Islamic bonds sales, as Shariah- compliant debt offerings rose 80 percent to US$25.9 billion in 2011, according to data compiled by Bloomberg.
Companies and governments in the six member nations of the Gulf Cooperation Council have issued US$7 billion of Islamic bonds this year, up 77 percent from the same period of 2010, according to data compiled by Bloomberg. Emirates, the world’s biggest airline by international traffic, Dana Gas PJSC and Al Hilal Bank may sell sukuk, debt that pays returns on assets to comply with Islam’s ban on interest.
“We are ready to relook at the GCC markets in a more aggressive manner,” said Kuala Lumpur-based Badlisyah. “We have to recognize we aren’t big in the Middle East and will look for the right partners in the GCC.”
The GCC includes Bahrain, the United Arab Emirates, Kuwait, Saudi Arabia, Oman and Qatar. HSBC, Europe’s largest bank, had a 22 percent market share of sukuk underwriting, compared with Standard Chartered’s 15 percent.
Sukuk ‘Preference’
Financial institutions are venturing into the Middle East to take advantage of increased government spending on building roads, railways and power plants.
HSBC Amanah, the Islamic unit of London-based HSBC, expects strong demand for Shariah-compliant products in the Middle East. Some of the GCC members were largely untouched by the so-called Arab Spring, which saw uprisings topple leaders in Egypt and Tunisia and threaten regimes in Syria, Libya and Yemen.
“The sukuk pipeline looks very busy for the simple reason that the market remains relatively open, so companies and governments are taking advantage,” Razi Fakih, deputy chief executive officer of HSBC Amanah in London, said in an e-mail interview on Dec. 2. “Given the Arab Spring and global market volatility, there is a preference among investors for sukuk because it is less volatile. The outlook looks good for 2012.”
CIMB set up an office in Bahrain five years ago but doesn’t have a deposit-taking bank there, said Badlisyah, whose company arranged 20 percent of global sukuk this year, versus 15 percent and 8 percent for HSBC and Standard Chartered. CIMB was also the biggest underwriter for Malaysian ringgit-denominated Islamic bonds with 31.1 percent market share in 2011, data compiled by Bloomberg show. -- Bloomberg
CIMB, which dominated global sukuk sales without managing any transactions in the Middle East in 2011, is seeking to form alliances in 2012, Badlisyah Abdul Ghani, chief executive officer of CIMB Islamic Bank Bhd, a unit of CIMB Group, said in a Nov. 29 interview. HSBC and Standard Chartered rank third and fifth for international Islamic bonds sales, as Shariah- compliant debt offerings rose 80 percent to US$25.9 billion in 2011, according to data compiled by Bloomberg.
Companies and governments in the six member nations of the Gulf Cooperation Council have issued US$7 billion of Islamic bonds this year, up 77 percent from the same period of 2010, according to data compiled by Bloomberg. Emirates, the world’s biggest airline by international traffic, Dana Gas PJSC and Al Hilal Bank may sell sukuk, debt that pays returns on assets to comply with Islam’s ban on interest.
“We are ready to relook at the GCC markets in a more aggressive manner,” said Kuala Lumpur-based Badlisyah. “We have to recognize we aren’t big in the Middle East and will look for the right partners in the GCC.”
The GCC includes Bahrain, the United Arab Emirates, Kuwait, Saudi Arabia, Oman and Qatar. HSBC, Europe’s largest bank, had a 22 percent market share of sukuk underwriting, compared with Standard Chartered’s 15 percent.
Sukuk ‘Preference’
Financial institutions are venturing into the Middle East to take advantage of increased government spending on building roads, railways and power plants.
HSBC Amanah, the Islamic unit of London-based HSBC, expects strong demand for Shariah-compliant products in the Middle East. Some of the GCC members were largely untouched by the so-called Arab Spring, which saw uprisings topple leaders in Egypt and Tunisia and threaten regimes in Syria, Libya and Yemen.
“The sukuk pipeline looks very busy for the simple reason that the market remains relatively open, so companies and governments are taking advantage,” Razi Fakih, deputy chief executive officer of HSBC Amanah in London, said in an e-mail interview on Dec. 2. “Given the Arab Spring and global market volatility, there is a preference among investors for sukuk because it is less volatile. The outlook looks good for 2012.”
CIMB set up an office in Bahrain five years ago but doesn’t have a deposit-taking bank there, said Badlisyah, whose company arranged 20 percent of global sukuk this year, versus 15 percent and 8 percent for HSBC and Standard Chartered. CIMB was also the biggest underwriter for Malaysian ringgit-denominated Islamic bonds with 31.1 percent market share in 2011, data compiled by Bloomberg show. -- Bloomberg
