Sudan: Bank of Khartoum to restart sukuk sales

Bank of Khartoum, Sudan’s oldest bank, plans to start selling Islamic corporate bonds, or sukuk, again as the economic outlook for African country improves in the wake of an oil deal with South Sudan, its general manager said. 

Fadi Salim Faqih told Reuters the Islamic bank, which is around a fifth-owned by Dubai Islamic Bank, expects to post a record profit this year boosted by strong lending and a substantial windfall from the devaluation of the Sudanese pound. 

“A couple of sukuks have been started,” Faqih said in an interview late on Tuesday, saying the bank could realistically issue $100mn in bonds for local companies by early 2013. 
The bank arranged several sukuk issues in 2011, but stopped the sales as Sudan’s deep economic crisis raised the risk of default. 

Deprived of three-quarters of its oil production when South Sudan became independent in July 2011, Sudan has been struggling with a severe downturn and annual inflation of over 40%. 

Last month, the two countries agreed to restart oil exports from the South through northern pipelines and a Sudanese port, giving both ailing economies a much-needed shot in the arm. 
Much of the Sudanese market is dominated by government-linked banks. Western lenders shun the Arab African country because of US trade sanctions in place since 1997, leaving the market to Gulf lenders such as QNB. 

Local companies from the aviation, real estate and hotel industries are among those now showing an interest in issuing Islamic bonds, said Faqih. 

The Bank of Khartoum, which also owns a South Sudan bank, also plans to fund exports such as livestock, cash crops and iron ore as Sudan expands its mining and agricultural production to offset the loss of oil. 

“This year we established a new unit which is specialised in funding exports,” he said. 
It also plans to add 24 new branches to its existing network of 55. 

The bank, a heavyweight on Khartoum’s stock exchange, expects a net profit of more than 200mn pounds (around $35mn) in 2012, up from 63mn pounds last year.
 
The profit jump for the bank, which has substantial dollar denominated assets, is largely driven by a devaluation of the Sudanese pound and a rise in lending and customer deposits, said Faqih. Its finance book rose to 4.8bn pounds at the end of September, up from 3.6bn pounds at year-end and deposits are up 23% this year, he said.

(Gulf Times / 25 Oct 2012)

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Sudan wants Malaysia to establish Islamic banking

KUALA LUMPUR: The Sudan government has invited Malaysia to help set up Islamic banks in the African country in a move that officials believe will go a long way in facilitating trade and investment financing between both countries.

Last year, total trade between Malaysia and Sudan stood at $94.4 million, an increase of 5.9 percent from 2010.

Sudan’s Ambassador to Malaysia Nadir Yousif Eltayeb said the country welcomes three Islamic banks to set up branches.

Speaking at a press conference on Business Opportunities in Sudan, he said more than 50 Malaysian companies are expected to invest in the country, in selected sectors.

Among these are electrical and electronics, small medium enterprises and halal products.

“There is abundant land in Sudan, and therefore, we would like to focus on agriculture. Sudan is seeking expertise from Malaysia’s Malaysian Agricultural Research and Development Institute (MARDI) and the Federal Agriculture Marketing Authority (FAMA),” Nadir said.

Sudan has at present cultivated corn and basmati rice.

Apart from that, the country which is a major supplier of beef and lamb to Saudi Arabia, also plans to export its meat products to Malaysia, especially during the festive season.

Nadir said Malaysian investors need not worry about the country’s stability as Petronas had managed to do its business there for the past 15 years.

A Malaysia-Sudan Trade and Investment Forum will be held in Khartoum from November 4-5 to highlight business opportunities in the country.

(Bikyamars / 10 August 2012)

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Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Sudan sells $160 million worth of sukuk

Sudan's latest issue of Islamic "sukuk" bonds was fully subscribed and raised the Sudanese pound equivalent of about $160 million, and two more such issues are planned this year to help make up for the loss of oil revenue, a debt official said. 

Sudan also hopes to sell $758 million of dollar-denominated sukuk, an offer which has already been partly subscribed, said Osama Saeed, head of the research and statistics section at Sudan Financial Services Company, which issues Islamic bonds on behalf of the government. 

Sudan's economy has been struggling since South Sudan declared independence a year ago under a peace deal, taking control of about three-quarters of the country's crude output. 

Oil brought in most of Sudan's state revenues and foreign currency, so the loss of the oil led to a budget deficit, a depreciation in the pound on the black market and a high rate of inflation for food and other goods, many of which are imported. 

(Business Recorder / 09 July 2012)

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www.alfalahconsulting.com
Islamic Investment Malaysia:
www.islamic-invest-malaysia.com

Sudan eyes up to $1.5 bln with pipeline-backed sukuk

KHARTOUM (Reuters) - Sudan aims to raise $1 billion to $1.5 billion this year with Islamic "sukuk" bonds that offer stakes in an oil pipeline, a move the African country hopes will draw more Gulf Arab investment to its debt market, a senior official said on Monday.

Sudan Financial Services Co., which issues Islamic bonds on behalf of the government, wants to offer the dollar-denominated sukuk within two months, General Manager Azhari Eltayeb Elfaki told Reuters.

The debt agency is also preparing to issue sukuk that will be repaid with profits from gold exports and which investors will be able to buy in foreign or local currency, he said.

Sudan lost about three quarters of its oil output when South Sudan seceded in July, aggravating a foreign currency shortage, budget gap and high inflation in the north.

Depreciation of the Sudanese pound on the black market has dampened demand for debt denominated in local currency, raising the appeal of debt issued in foreign currencies.

"Now, inshallah (God willing), we are going to make sukuk for the pipeline," Elfaki said in an interview, referring to an oil pipeline running from oil fields including Heglig to a Red Sea terminal at Port Sudan.

"Now they (the finance ministry) are making the technical studies and the evaluation of the pipeline itself. I think they will finish it, inshallah, by the end of this month."

Elfaki said he expected the sukuk to draw mostly investors from Gulf Arab states like Saudi Arabia and would total $1 billion to $1.5 billion.  

(Reuters / 19 March 2012)

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Alfalah Consulting - Kuala Lumpur:
www.alfalahconsulting.com
Islamic Investment Malaysia:
www.islamic-invest-malaysia.com