Asian demand to drive Qatar sukuk

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The Doha Metro is one of many major infrastructure projects Qatar is looking to finance

Sukuk issuances are set to expand in Qatar on top of financial pressures from increased infrastructure spending and an expected rise in demand from Southeast Asia and China.

Increased spending in infrastructure aligned with the country’s 2016 investment plans, which account for 40 per cent of Qatar’s budget, and the upcoming FIFA World Cup in 2022 will create greater demand for project finance, analysts predict.

Shariah-compliant bonds, already accredited with successfully attracting subscribers from China, Southeast Asia and even the West, will be one way that Qatari authorities and government-related companies will fund projects that include $11 billion for a new international airport and $5.5 billion for a deep-water seaport.

Another $25 billion rail network will cover the construction of a metropolitan railway in Doha, a high-speed rail link between New Doha International Airport, Doha city centre and across the proposed Qatar-Bahrain Causeway into Bahrain, in addition to a freight line that will link up with the wider GCC rail network.

In 2011, Qatar issued 11 per cent of all global sukuk, placing it second behind Malaysia, which represented a substantial 69 per cent of the world’s total issuances.

The Middle East North Africa (MENA) region accounted for 16 per cent of the world’s total sukuk issuances in 2011, amounting to $84.4 billion.

Difficulties getting credit from banks, heightened volatility in equity markets and the ongoing eurozone crisis will also continue to push finance seekers towards sukuk.

Following a greater global shift towards the instrument on top of higher sukuk popularity, global sukuk issuances could be up as high as 50 percent year-on-year in years to come, HSBC Amanah, the bank’s Shariah-compliant wing, announced in early 2012.

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Reading Time: 2 minutes

The Doha Metro is one of many major infrastructure projects Qatar is looking to finance

Sukuk issuances are set to expand in Qatar on top of financial pressures from increased infrastructure spending and an expected rise in demand from Southeast Asia and China.

Reading Time: 2 minutes

The Doha Metro is one of many major infrastructure projects Qatar is looking to finance

Sukuk issuances are set to expand in Qatar on top of financial pressures from increased infrastructure spending and an expected rise in demand from Southeast Asia and China.

Increased spending in infrastructure aligned with the country’s 2016 investment plans, which account for 40 per cent of Qatar’s budget, and the upcoming FIFA World Cup in 2022 will create greater demand for project finance, analysts predict.

Shariah-compliant bonds, already accredited with successfully attracting subscribers from China, Southeast Asia and even the West, will be one way that Qatari authorities and government-related companies will fund projects that include $11 billion for a new international airport and $5.5 billion for a deep-water seaport.

Another $25 billion rail network will cover the construction of a metropolitan railway in Doha, a high-speed rail link between New Doha International Airport, Doha city centre and across the proposed Qatar-Bahrain Causeway into Bahrain, in addition to a freight line that will link up with the wider GCC rail network.

In 2011, Qatar issued 11 per cent of all global sukuk, placing it second behind Malaysia, which represented a substantial 69 per cent of the world’s total issuances.

The Middle East North Africa (MENA) region accounted for 16 per cent of the world’s total sukuk issuances in 2011, amounting to $84.4 billion.

Difficulties getting credit from banks, heightened volatility in equity markets and the ongoing eurozone crisis will also continue to push finance seekers towards sukuk.

Following a greater global shift towards the instrument on top of higher sukuk popularity, global sukuk issuances could be up as high as 50 percent year-on-year in years to come, HSBC Amanah, the bank’s Shariah-compliant wing, announced in early 2012.

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