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Middle East 2012 bond sales to exceed last year's US$27.6 billion, says Morgan Stanley


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Middle East 2012 bond sales to exceed last year's US$27.6 billion, says Morgan Stanley

Sun January 15, 2012 6:08 pm

INTERNATIONAL. Middle East and North Africa foreign bond sales will this year surpass last year's US$27.6 billion as borrowers need to pay loans and will increasingly choose bonds, Morgan Stanley & Co. said.

“The bulk will be government and government-related debt issuance” and financial institutions will continue to be “active,” Klaus Froehlich, managing director for capital markets for the Middle East and North Africa told reporters in Dubai today.

Offers of Islamic bonds or sukuk will also rise as there is “enormous appetite” for the debt, he said.

International bond sales from the Middle East and North Africa fell 17% in 2011 from US$33.1 billion in the previous year, according to Morgan Stanley, as political unrest sweeping parts of the region and Europes’s sovereign debt crisis forced some issuers to postpone sales.

The Qatar government’s US$5 billion sale in a three-part issue in November was the single biggest issue from the region in 2011.

Borrowers in the Middle East and North Africa have raised US$1.3 billion from three issues this year, all of them sales of sukuk by financial institutions, according to data compiled by Bloomberg.

Tamweel, a United Arab Emirates mortgage company, raised US$300 million from five-year Islamic bond January 12, while Emirates Islamic Bank PJSC, a Dubai-based bank, sold US$500 million in five-year Islamic bonds January 10.

Bonds contributed 41% of debt raised in the region last year from 16% in 2007, according to Morgan Stanley.

The region’s market for initial public share offerings may recover “as there are some high quality issuers preparing” to access the market, Froehlich said. A “high single digit” number of companies plan to sell shares in IPOs or to increase capital that will be marketed internationally, he said. Each of these issues will raise at least US$250 million

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