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Despite the summer holidays accompanied by the month of Ramadan, the Islamic bonds market witnessed noticeable activity in August 2011. There were some launches as well as announcements that some much-delayed and long-awaited sukuk would finally be issued, as early as September or in the fourth quarter of the year. A total of USD6 billion of sukuk were sold in August, according to the Zawya Sukuk Monitor, compared to USD4.7 issued in the same period of 2010.
Perhaps the most interesting development in August was the Government of Indonesia selling its first Islamic treasury bills in two consecutive auctions on August 2 and August 23, raising IDR570 billion (USD66.8 million) and IDR330 billion (USD38.7 million), respectively. Both with six-month tenors, the issues see Indonesia following Bahrain, Gambia, Brunei and Malaysia into the short-term sukuk market.
Two long-awaited benchmark sukuk saw the light in the Gulf. The UAE's Nakheel finally announced it is in the process of issuing the first tranche of its fourth sukuk as part of a restructuring plan. Saudi Arabia's SATORP received the approval from the Capital Market Authority and said a roadshow will take place in September to sell its long-awaited sukuk.
Just as the month was about to end, Al Hilal Bank announced it might issue a benchmark sukuk to finance its expansion and that this might take place before the year ends. Al Hilal joins a list of Gulf banks that are aiming to sell sukuk for the first time in 2011; others include Qatar's QIIB and Masraf Al Rayan...
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Sukuk Monitor
