Future of ASEAN sukuk placement

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Steve Troop, CEO of Barwa Bank, Qatar

Steve Troop, CEO of Barwa Bank, Qatar, looks at the future of ASEAN sukuk placements and the response from GCC investors.

GCC economies have performed well throughout and post the financial crisis with GDP almost quadrupling since 2001 and likely to reach $1.5 trillion in 2013. While the oil and gas sector still makes up the majority of these countries’ GDP growth, other areas are becoming increasingly active with rapid economic growth driving massive infrastructural spending projects. At the same time, there remains a considerable GCC capital surplus that is creating increasing demand for suitable investment opportunities. Cultural and regulatory preferences mean that shariah-compliant investment tools, most notably sukuks, attract sovereign funds, as well as institutional and individual investors across the GGC region.

ASEAN markets have become an attractive destination for GCC investors who are looking to spread risk through diversification. Sukuk markets in ASEAN are also deeper and longer-established and provide greater liquidity than in other emerging sukuk markets.

It is also worth noting the recent increased appetite for GCC placements in ASEAN markets where investors are also keen to diversify their investment portfolios. This was most notable in the recent sukuk placements for Qatar, the Dubai government and various Islamic banks in the GCC where a significant proportion of these issues were taken up by ASEAN fund and private banking portfolio managers.

Continuing strong economic growth in both the GCC and ASEAN, together with investor desire for diversification leads us to conclude that this two-way demand for shariah-compliant investment opportunities will continue to outpace supply and make sukuk issuance and trading a major growth sector for the foreseeable future.

Barwa Bank

 

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Reading Time: 1 minute

Steve Troop, CEO of Barwa Bank, Qatar

Steve Troop, CEO of Barwa Bank, Qatar, looks at the future of ASEAN sukuk placements and the response from GCC investors.

Reading Time: 1 minute

CEO_Steve_Troop smaller
Steve Troop, CEO of Barwa Bank, Qatar

Steve Troop, CEO of Barwa Bank, Qatar, looks at the future of ASEAN sukuk placements and the response from GCC investors.

GCC economies have performed well throughout and post the financial crisis with GDP almost quadrupling since 2001 and likely to reach $1.5 trillion in 2013. While the oil and gas sector still makes up the majority of these countries’ GDP growth, other areas are becoming increasingly active with rapid economic growth driving massive infrastructural spending projects. At the same time, there remains a considerable GCC capital surplus that is creating increasing demand for suitable investment opportunities. Cultural and regulatory preferences mean that shariah-compliant investment tools, most notably sukuks, attract sovereign funds, as well as institutional and individual investors across the GGC region.

ASEAN markets have become an attractive destination for GCC investors who are looking to spread risk through diversification. Sukuk markets in ASEAN are also deeper and longer-established and provide greater liquidity than in other emerging sukuk markets.

It is also worth noting the recent increased appetite for GCC placements in ASEAN markets where investors are also keen to diversify their investment portfolios. This was most notable in the recent sukuk placements for Qatar, the Dubai government and various Islamic banks in the GCC where a significant proportion of these issues were taken up by ASEAN fund and private banking portfolio managers.

Continuing strong economic growth in both the GCC and ASEAN, together with investor desire for diversification leads us to conclude that this two-way demand for shariah-compliant investment opportunities will continue to outpace supply and make sukuk issuance and trading a major growth sector for the foreseeable future.

Barwa Bank

 

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