(MENAFN- Arab Times) Â The primary sukuk market continued its growth momentum in May, despite fears of a slowdown in the international arena. The month brought in a further USD12.1bln worth of new issuances to total USD55.8bln for the five months of 2013. Malaysia accounted for the largest share of the sukuk market during the month with 64.4% of the issuance total as compared to 58.4% during April. The notable increase over previous months is a result of a slight increment in central bank issuances and a slight decline of Middle East sukuk. Saudi Arabian sukuk amounted to USD2.1bln bringing the market share to 17.5% for the month. Total issuances from Saudi Arabia in 2013 reached USD7.1bln at the end-May, while issuances from the UAE totalled USD5.2bln. There were two corporate issuances from Turkey during the month, amounting to USD700mln or 5.8% of the total.
Markets
Notable issuances during the month include the USD1bln Islamic Development Bank sukuk Wakalah Bel-Istithmar, issued with a 5-year tenure. The sukuk was priced at 1.535% and attracted orders worth USD1.5bln. Other notable issuances include the 10-year tier 2 capital sukuk by Albaraka Turk, which was the first sukuk Murabahah transaction issued in the international capital markets from Turkey. Competing participation bank Turkiye Finans also took the opportunity to issue a USD500mln sukuk priced at 3.95%. Orders came in at over USD1.9bln for the paper. Sovereign issuers made up 64.5% of the primary market in May, while government related entities accounted for 1.9% and corporates took the remaining 29.6%. Malaysian ringgit accounted for 64.4% of issuances during the month. The six US dollar issuances amounted to USD3bln in May, accounting for 24.9% of the market.
A total of 95 sukuk were issued in May vs. 40 sukuk in April and 64 in March. Among these, 59 were issued by the corporate sector totalling USD3.6bln (April: USD2.8bln, +28.6%), 32 by sovereigns totalling USD8.3bln (April: USD4.2bln, +97.6%) and 4 by government related entities worth USD231.6mln (April: USD16.4mln, +1312.2%). The yield of the state-owned Tourism and Development Investment Company's (TDIC) sukuk led a general rise in Middle Eastern papers, increasing 21.4% during May.
The yield of the Central Bank of Bahrain sukuk maturing in 2014 increased by 15.7% or 16.1 basis points in May to reach 1.215%. The central bank introduce a strategic plan for the Islamic finance industry in May which outlined four key areas to be addressed, such as the regulatory framework for Islamic products and adopting proper corporate governance for Islamic investment. The yield of Dubai Ports World's moved to 3.393% during May, representing a 14.1% increase over the month. The yield lost 16.9% has gained 5.6% this year. DP World said it made a profit worldwide of USD749mln in 2012 generated from the company's 65 marine terminals located across six continents. The yield of the Islamic Development Bank's sukuk maturing in three years' time witnessed an increase of 17.7% or 15.4 basis points in May to reach 1.025%. The supranational institution successfully placed a further USD1bln worth of AAA-rated sukuk in May which will mature in 2018.
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