Sharjah Islamic raises $500 m in sukuk sale

Updated 10 April 2013
0

Sharjah Islamic raises $500 m in sukuk sale

DUBAI: Sharjah Islamic Bank (SIB) sold a $500 million five-year Islamic bond at tighter pricing than initially indicated due to strong demand for sharia-compliant debt from the Gulf Arab region.
The sukuk, maturing in 2018, priced at par with a profit rate of 2.95 percent, at the lower end of the final guidance range of between 2.95 percent and 3 percent.
Islamic banks have stepped up sales of Shariah-compliant debt to meet their liquidity requirements and also to increase their capital reserves.
Demand for the sukuk was high, and the order book was over $2 billion when the official guidance was released.
SIB, rated BBB+ by Standard & Poor’s and Fitch Ratings, is 31-percent owned by the government of Sharjah, the third-largest emirate in the UAE. Kuwait Finance House (KFH) holds a 20 percent stake in the Islamic lender.
Its existing sukuk, a $ 400 million 4.715 percent issue maturing in 2016, was bid at 106.9 cents on the dollar, according to Thomson Reuters data, to yield 2.4 percent.
One trader said the new issue offered a negligible premium for a two-year extended maturity, and that this may lead to a weakening in secondary markets.
In recent bond and sukuk issues in the region, heavy bids caused pricing to tighten dramatically in the primary market, setting the bonds up to fall in the secondary market when it becomes clear that underlying demand for them at the final pricing is not as great as the order books suggested.
Proceeds from the sukuk are expected to be transferred to the bank through a special purpose vehicle, according to a company prospectus.
Abu Dhabi’s Al Hilal Bank, HSBC Holdings, Kuwait’s Liquidity Management House, a unit of KFH and Standard Chartered Plc are mandated lead arrangers on the sukuk.


Samsung Electronics reports 52% jump in Q1 net profit

Updated 48 min 28 sec ago
0

Samsung Electronics reports 52% jump in Q1 net profit

  • Profits bump thanks to strong demand for memory chips, smartphones
  • Net profit for the January to March period hit 11.69 trillion won ($10.8 billion)

SEOUL:  Samsung Electronics reported a 52 percent jump in its first quarter net profit Thursday, thanks to strong demand for memory chips and its latest flagship smartphone.
Net profit for the January to March period hit 11.69 trillion won ($10.8 billion), up from 7.68 trillion won a year earlier, the company said in a regulatory filing.
Operating profit was a record 15.64 trillion won, in line with the estimate of 15.6 trillion won suggested in a preliminary guidance report released earlier this month.
“The semiconductor business posted solid earnings — 11.55 trillion won in operating profit on a 20.78 trillion won revenue — on strong demand for memory chips,” the company said in a statement.
Total sales grew 19.8 percent to 60.56 trillion won and Samsung expects the memory business to maintain its strong performance in the second quarter.
But generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business in the face of rising competition, it said.