May 15 2011 |
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Sudan has high hopes for Sukuk sale
Sudan is hoping to sell Sukuk worth S£765m ($286.5m), after the last issue did not go well. The government is aiming to issue S£3.6bn ($1.3bn) in 2011, but faces uncertainty stemming from the country splitting in two as the primarily Christian and Animist black south gains independence from the Muslim Arab north.The south voted in January for independence and will split off in July, which is creating problems for the north, given that the majority of the country's oil output comes from the south and makes up 90% of the country's exports.
As a result of the northern government losing control of the commodity, there is a lot of market uncertainty about how it will repay its Sukuk. Most of Sudan's capital market is domestic, as the US imposed economic sanctions on Sudan after it placed the country on its State Sponsors of Terrorism List (SSTL). However, economic sanctions have been eased over the last few months.
Elfaki said he expected a profit rate of 15% for the Sukuk, which is well above Gulf sovereign or corporate Sukuk profit rates, which typically yield less than 10%. Sudan government Sukuk have a maturity of at least one year depending on the structuring.
In the last issue, in February, Sudan sold only about S£600m ($225m) of an offer of S£863m ($323m). The poor uptake was blamed on the southern Sudan independence vote.
© The Islamic Globe 2011
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