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Finance & Banking | Global Arab Network
GCC Sukuk Market On Road To Recovery
Global Arab Network - - Maha Karim
In light of the much documented recovery and activity in Islamic Capital Markets the 2009 London Sukuk Summit is indeed well-timed and we hope that you will take advantage of our offer. The anticipated launch of IDB's $500 million international Sukuk this month and a huge improvement in the average price of and yield from Sukuk over the last four months is further evidence that the market is rallying fast and on track for a dramatic upturn in confidence over the next year.

Economic and fiscal stimulus packages in the GCC countries, including the $10 billion bailout loan given to Dubai by the UAE Central Bank, the recent rally in world capital markets and rising crude oil prices, have impacted positively on the GCC Sukuk market in the past quarter.

Bahrain is planning two imminent sovereign Sukuk issuances - a domestic Sukuk offering and a planned $500 million international Sukuk. These offerings, say bankers, should kick start the Sukuk market in the GCC, triggering a number of other new deals to follow later this year if issuers become more confident that they can attract investors.
"The recent sharp rise in the average price of GCC corporate Sukuk has been fuelled by the growing belief that corporate Sukuk default risk has been greatly reduced" Neale Downes, Partner, Trower & Hamlins.

In the UK, the Finance Bill 2009, which is currently going through its final stages in the Houses of Commons and Lords, will introduce relieving measures for stamp duty land tax, capital gains and capital allowances rules for land transactions involved in connection with the issuance of Sukuk. The changes are intended to remove the previous tax barriers that essentially prevented the issuance of real estate backed sukuk by UK corporates - thus enabling sukuk to be held, issued and traded without incurring stamp duty land tax and corporate tax costs over and above that which would be incurred in connection with similar dealings in traditional corporate bonds.

With these encouraging developments, these are indeed exciting times for the Islamic finance sector which has better withstood the vagaries of the credit crunch and the global financial market. The market developments whether they be in Dubai, London, Hong Kong, Singapore, Bahrain, Jeddah, Hong Kong or Kuala Lumpur are underpinned by progress in enabling regulation, legislation, innovation, Shariah governance, diversification and market education.

The 2009 London Sukuk Summit is specifically aimed at harnessing these developments to keep you informed about the Sukuk market developments and innovation; to provide a platform for dialogue with your peers; and to give you a voice in contributing to the future direction of the Islamic debt and capital markets. As a valued delegate to the Sukuk Summit series, we hope that you will take advantage of our offer to continue the dialogue, identify the opportunities and reap the benefits of this dynamic and rapidly growing industry sector!

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