Global Sukuk Market to Hit US$44 Billion in 2012

KUALA LUMPUR, July 2 (Bernama) -- The global sukuk market continues be sound and is on track to touch the predicted market size of US$44 billion (US$1 = RM3.20) by year-end from US$37 billion in 2011. Rafe Haneef, Chief Executive Officer of HSBC Amanah Malaysia Bhd, said for the first half of 2012, the global sukuk market stood at US$20.5 billion, up from US$15 billion in the corresponding quarter last year. The growth, he said would be fuelled by many sukuk-funded mega projects which are in the pipeline in Malaysia, Asia and the Middle East, similar to the Tanjung Bin power plant project which is worth more than RM6 billion (US$1.89 billion). "What we hear is that there are a lot of deals in the pipeline. There are significant development in the Middle East and most of it would be funded through sukuk," he told reporters after the launch of HSBC Amanah City Centre, here Monday. He said the ongoing financial and debt turmoil in Europe will continue to create opportunities in Asia and the Middle East as the global liquidity pool is moving away from risky market to more safer markets, which are growth-oriented markets. "You'll find that the liquidity will change and see asset growth in the Middle East and Asia. The shift is creating price tension where pricing becomes more attractive and people are going out to issue sukuk. "HSBC Global predicted the market to touch US$44 billion this year. As of now, we are already at the halfway mark," he said. As for HSBC, he said the global bank has a sizeable share of the sukuk market with a 35 per cent share. Moving forward, the bank expects to maintain the percentage, Rafe said. "We are working from three main points, which are Saudi Arabia, Dubai and Kuala Lumpur," he said. On HSBC's Malaysian operations, Rafe said the bank believes it has a full suite of financial products, and in addition, it is looking to introduce Islamic overdraft service to its customers by end of this year. -- BERNAMA