Friday, June 4, 2010

HSBC Amanah: Asian sukuk sales seen strong in 2010

KUALA LUMPUR: Sukuk issuers in Asia are likely to sell at least 10%-20% more of Islamic paper this year with the European debt crisis seen having limited impact on Asia's growth prospects, HSBC Amanah said on Tuesday, June 1.

Malaysia and Indonesia would probably remain the region's main sukuk issuers although centres such as Hong Kong, Japan, Singapore and South Korea would emerge as issuers over time, said Mukhtar Hussain, HSBC Amanah's global chief executive.

"In Asia we have positive economic growth, we have relatively high savings rates, we have liquid markets," Hussain said in an interview.

The US$1 trillion (RM3.3 trillion) Islamic finance industry is looking to Asia to shore up the sukuk market as Gulf issuers ' the other bastion of Islamic bond sales ' struggle to recover from the impact of Dubai's debt crisis.

Global sukuk sales totalled US$23.3 billion last year, off the record US$34.3 billion logged in 2007, according to Standard & Poor's.

Malaysia, Pakistan and Indonesia together accounted for just over half of total global sukuk issuance last year, according to Thomson-Reuters data.

A Reuters poll of Islamic finance practitioners in April predicted that sukuk issuance would range between US$26 billion-US$28 billion or top US$28 billion this year.

Asia's booming economies, such as China and India, are seen as engines of growth although the World Bank warned on Monday developing countries would suffer if Europe's governments fail to deal with their debt problems.

Mukhtar, who is also chief executive of HSBC Bank Malaysia, said the bank would retain a growth path for the rest of the financial year after posting a 20% rise in net profit in the first quarter.

"We hope that in 2010, we'll achieve a positive outturn following what was a challenging 2009 for HSBC," he said.

The lender plans to open two new conventional banking branches in Malaysia this year, Mukhtar said. He declined to give an investment figure. ' Reuters

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