SA sukuk cements Islamic finance ascendancy

Author: Gemma Varriale | Published: 11 Sep 2014

South Africa is poised to become the latest country to issue a sukuk, as both Islamic and non-Islamic governments tap increasing demand for shariah-compliant instruments.

Its government started investor meetings in Europe, Asia and the Middle East this week. It plans to raise at least $500 million in its maiden issue of Islamic bonds.

The announcement follows the UK government’s landmark sovereign sukuk, which was the first from a non-Muslim country. Hong Kong has also just sold $1 billion of sovereign Islamic bonds. Luxembourg too is planning investor meetings to market is debut sukuk.

"South Africa has been discussing the structure and approach to a sovereign sukuk for a couple of years," said Shibeer Ahmed, a UAE-based partner with White & Case. "It’s important that we’re now seeing non-Muslim countries issuing sukuk."

South Africa is expected to follow the well-trodden path of...