Interpreting Middle East Economic News and Analyzing Market Trends

Turkey issues $1.25 billion sukuk and sets up Islamic finance center as it finally embraces Islamic finance


 Source: Haberler

The Turkish government decided to jump back into the sukuk market with its latest $1.25 billion sukuk al-ijara.  The country’s first sovereign sukuk was back in September 2012 with a $1.5 billion issue.  The first issue as well as this latest issue have been very successful with high demand from the Middle East.  So much so that Turkey has now decided to embrace Islamic finance by setting up an Islamic finance research center.

Turkey’s government is making its return to the sukuk market with a new US$1.25bn Islamic bond.

The sovereign, rated BBB- by Fitch and Baa3 by Moody’s, mandated HSBC, Standard Chartered Bank and Qatar’s QInvest to run its benchmark issuance, priced on Thursday.

The five-year paper was priced at 300 basis points over mid-swaps, tightened from initial guidelines of 325 basis points.

Turkey entered the sukuk market in September 2012 with a US$1.5bn deal.

Read the full article from emeafinance.


With Europe still struggling to deal with its debt problems, Turkey has turned east where capital is waiting to be invested.  The country has always shied away from Islamic finance and has yet to establish Islamic banking regulation or acknowledge Islamic banks.  Islamic finance, however, has had a presence in Turkey since the latest 1980s with the establishment of ‘participation banks.’  Today, these banks represent only 5% of the overall assets in the Turkish banking system (roughly TRY 70 billion), but are growing at a faster pace than their conventional counterparts.

The first Islamic Finance Research Center will open in Turkey, the chairman of the Board of Directors of the Istanbul Stock Exchange Ibrahim Turhan said, Turkish Zaman newspaper reported on Thursday.

According to Turhan, the first Islamic finance research center to be opened in Istanbul.

Read the full story from Haberler.

With the success of its second sukuk issue and the establishment of an Islamic finance center, Turkey seems ready to jump into Islamic finance with both feet.