$ 66.4 bn sukuk issued globally in H1

Updated 23 August 2012
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$ 66.4 bn sukuk issued globally in H1

The volume of sukuk issued globally during the first half of the current year reached $ 66.4 billion, according to a report released by KFH-Research, an affiliate of Kuwait Finance House (KFH).
The increase in sukuk issuance during the period was triggered by large sums of money pumped by sovereign authorities and central banks to absorb excess liquidity, the report said.
It said the GCC countries used to be a main market for sukuk during the first half of the year, despite the absence of Kuwait and Qatar.
The global sukuk currently represents a dynamic part of the Islamic financial system that continues to grow at a remarkable pace.
After the largest quarterly issuance witnessed to date in the Q1 2012, the global sukuk market has continued its growth trend throughout the Q2 2012 on both primary and secondary market fronts, the report said.
The first half of 2012 witnessed a diverse range of new issuances which round up at $ 66.4 billion for the period, while the secondary market grew to $ 210.8 billion, representing a y-o-y growth of 40.1 percent and 30.5 percent, respectively, it said.
The growth of sukuk issuances this year can be attributed to a number of factors, including the declining yields for both corporate and sovereign issuances given significant demand, the rarity of high quality high yielding papers and the flight to fixed income safety amid more concerns emerging from Europe, the report said.
The primary sukuk market has been driven by the increasing number of funds raised by sovereigns and central banks to soak up excess liquidity and provide short-term investments, while new jurisdictions continue to enter the fray.
Malaysia has continued its dominance in the market issuing $ 18.5 billion in the second quarter to total $ 46.8 billion for the first half period.
The market share of Malaysian issuances has consistently been around 70 percent over the past five years and shows no signs of slowing down.
The UAE was the second largest domicile of issuances over the quarter with $2.4 billion worth, closely followed by Saudi Arabia with a pinch lower than $ 2.4 billion, according to the report.
By region, South Asia accounts for the majority of sukuk issuances in H1 2012 (79.3 percent), Indonesia maintaining the region’s second spot outside of Malaysia.
Indonesian issuances have grown significantly of late with the nation launching its “project sukuk” program as well as issue an encouraging number of sovereign certificates, mostly via auction or private placement, for fiscal financing.
Year-on-year Indonesia’s primary sukuk market has grown by 221.1 percent until end-1H 2012, it said.
According to the report, the MENA region, and more specifically the GCC region, has been a key market for issuances this year, growing by 6.1 percent despite no Qatari or Kuwaiti issuances thus far.
On a quarterly basis, GCC sukuk issuances have grown by 112.3 percent y-o-y in the 2Q12, although 39.5 percent lower than the Q1 2012.
During the Q2 2012, there have been a number of notable sukuk. Among them are the Islamic Development Bank’s $ 800 million, issued with a return of 1.357 percent over its five-year tenure, significantly lower than the $ 750 million issued at 2.350 percent during the Q2 2011.
Dubai issued its dual tranche sovereign sukuk Ijarah during April with a return of 4.900 percent for the five-year tenure ($ 600 million) and 6.450 percent for a 10-year tenure ($ 650 million).
Subsequently Dubai Islamic Bank entered the market in May with a five-year $ 500 million paper, managing to set a return at 4.752 percent, almost 15 basis points lower than its sovereign counterpart, the report said.
The second quarter has bolstered projections for the sukuk market moving forward given the higher uptake in sukuk issuances as well as the continued lower funding costs.
Significant demand for high quality papers means that issuers continue to benefit from better credit terms, it said.
The second half of the year is expected to have a further $ 30 billion worth of sukuk papers mature as at end-Q2 2012 and corporates will be eager to raise and refinance long-term facilities and improve financing efficiencies, the report said.

 


World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

Updated 22 June 2018
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World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

  • Dubai's “Dolce and Karama” is the emirate's copycat capital
  • Neymar Jr shirts are proving especially popular with local shoppers

DUBAI: Tucked away in an old residential district and far from Dubai’s glitzy air-conditioned malls, the Karama area of the city is doing a roaring trade in selling World Cup football shirts.

But if you’re looking for the genuine article, you may have come to the wrong place.

Karama is Dubai's copycat capital where the knockoff imitations of the world's most famous fashion brands are sold for a fraction of the genuine price.

Known to some locals jokingly by the epithet “Dolce and Karama,” a play on the Dolce & Gabbana Italian fashion house, this is a place where if you have to ask the price, you probably can afford it.

With three weeks to go until football’s new world champions are crowned, the world’s biggest sporting tournament is keeping the tills chiming on the street that has become notorious for selling everything from fake Luis Vuitton bags to knockoff Ray-Ban sunglasses.

However since the tournament kicked off just over a week ago, it’s been football not fashion, that has put a smile on the face of traders.

Retailing for a fraction of their high-street cost, the copycat shirts — especially those bearing the name of Brazilian superstar Neymar — are flying off the stalls less than week into the tournament, as UAE-based fans who want to don the colors of their favorite team or player, look for bargains.

Mohammad Ashraf has been trading in Dubai’s Karama Shopping Complex for 15 years.

At his store, Mina Fashion, Ashraf said the World Cup has brought a booming trade.

When asked how many shirts he would sell prior to the Fifa World Cup, he shrugged.

“Maybe one, two — maximum five a day,” he said.

But the Indian trader has quadrupled his business since last week’s kick-off.

“Now, we have been very busy,” he said. “We sell at least 20 pieces a day — maybe more,” he said.

His football shirts are a fraction of the cost of the genuine article on sale in Dubai malls where retailers are feeling the pressure from the growth of online rivals, the introduction of VAT and the strong dollar to which the UAE dirham is pegged — that is hitting tourist spending hard.

Karama football shirts sell for about 65 dirhams ($18) in adult size and 55 dirhams for children. But the real deal costs three or four times as much a few miles down the road in the Dubai Mall, the city’s biggest tourist draw.

In Karama, the football shirts of the Brazil, Argentina and Germany teams have been among the biggest sellers.

And the most popular player?

Ashraf said shirts bearing the name of Brazilian footballer Neymar da Sila Santos Junior have been flying off the shelves.

Abdulla Javid, runs Nujoom Al Maleb in the Karama shopping district — a shop selling a variety of knock-off sportswear — including World Cup shirts for men, youths and children.

“They are not real, not branded — branded ones are very expensive,” he said.

“We have shirts for Germany, for Argentina, for Portugal, for Sweden, for Brazil and for Belgium,” he said, pointing to racks of multi-colored football shirts.

Mens shirts retail for about 45 dirhams for adult sizes in his shop and 40 dirhams for youths. For young children, he sells shirts and shorts for a combined price of 30 dirhams.

The World Cup has also been a welcome boom for business.

“Before we sell maybe between five to 10 (shirts) a day,” he said. “Now, at least 20 to 30 pieces a day. It has been very busy. This time is a good time for us.”

Also at Karama Shopping Complex is Zico Sports.

Ahmed Jaber, a 53-year-old trader, said there are good deals to be found in at the shop he has worked in since the 1980s.

He sells football shirts that are both “branded” and “non-branded” — in other words the genuine article and cheaper knock-offs.

He said customers have been happy to shell out for the genuine football shirts for the adult sizes — which he sells for 379 dirhams, but for children, shoppers prefer to buy the fake football shirts, which he sells for about 30 dirhams.

The most popular shirts since the start of World Cup have been for Brazil, Argentina and France, he said, but his shops have an abundance of kit for all competing countries.

When he asked how the 2018 World Cup had been for business, he laughed.

“Not bad at all!,” he said.