Borrowers from the Persian Gulf may sell as much as $8.2 billion of Islamic bonds this year, the most since 2007, encouraged by the lowest yields in two months and accelerating economic growth.
Average yields on Shariah-compliant bonds from Gulf Cooperation Council countries fell to 5.385 percent on Jan. 4, the lowest level since Nov. 10, according to the HSBC/NASDAQ Dubai GCC Dollar Sukuk Index. Among companies planning to issue sukuk are Albaraka Banking Group BSC, Bahrain’s biggest publicly traded Islamic lender, which may sell as much as $500 million, and Saudi International Petrochemical Co. which may offer as much as 2 billion riyals ($533 million) this quarter, data compiled by Bloomberg show.
“It’s still a low-rate environment, and there’s still a window of opportunity,” Dubai-based Ahmad Alanani, head of Middle East fixed-income sales at Exotix Ltd., said in a telephone interview Jan. 10. “Anyone who will want to issue will have to issue now and lock in these rates before the recovery in the U.S. economy takes hold and yields go up.”
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