The flood gates open


  • Share via facebook
  • Tweet this
  • Bookmark and Share

A $500m sukuk from Turkiye Finans last week was just the latest in a flood of international debt issues from Turkey. But the identity of the arranging banks, and the investors who bought the issue, pointed to a shift in capital markets.

Of the four banks arranging the deal for Turkiye Finans, an Islamic bank majority-owned by Saudi Arabia’s National Commercial Bank, two were based in the Gulf: NCB Capital and Dubai’s Noor Islamic Bank.

And Middle Eastern investors dominated buying of the sukuk, taking 51 percent of the deal, which received just under $2bn in orders. In the past, European arrangers and investors dominated issuance of international bonds from Turkey. But in recent months the Gulf has started to play a major role, for commercial and possibly even political reasons.

“You will find more demand from investors in this region, in particular banks which are fairly liquid and sovereign wealth funds, to invest in financing in Turkey, be it through private placements, new issuances, or the public debt capital markets space,” says Georges Elhedery, head of global markets in the Middle East and North Africa (MENA) for HSBC.

“These investment flows are a developing trend as Turkey, which has a low savings rate, looks to tap the deep and liquid capital pools in MENA to fund its 2023 Vision, which includes investing some $350bn in transport and other infrastructure.”

Turkey’s upgrade to investment status by Fitch Ratings last November, and expectations that it will secure similar ratings from the other two major agencies, have fuelled an explosion of international issuance this year.

Turkish companies have issued about $9.5bn of US dollar-denominated bonds so far this year, compared to a total of $16.5bn for the whole of 2012, according to John Bates, corporate fixed income analyst for emerging markets at PineBridge Investments.

Article continued on next page

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
The flood gates open

The flood gates open

Turkey’s new fondness for sukuk has been met with increasing...

"Sleeping giant" debt market awakes in Saudi Arabia

After years in which the growth of Saudi Arabia's bond market...

Gulf bond issuers see opportunity in Malaysia

Gulf bond issuers see opportunity in Malaysia

Gulf looks to tap Malaysian investors with ringgit issues; country...

Most Discussed
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams