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Best sukuk house
HSBC has surrendered much of its retail Islamic finance business around the world, but it remains the unquestioned leader in international sukuk. During our review period it lead managed 22 sukuk transactions from the Middle East, Turkey and in Asia, including a 40.5% market share in the Gulf, and has a comfortable position at the top of the international sukuk league tables.
It’s not just the number of deals but also that HSBC is ubiquitous in the important ones. It was a lead manager on our sukuk of the year, the $1.5 billion deal for the Republic of Turkey, and on the record-breaking $4 billion sukuk from Qatar, the largest international sukuk ever. Among other sovereigns, it was on landmark deals for Indonesia, the government of Dubai and the Islamic Development Bank. It was on Axiata’s first rated renminbi-denominated sukuk, it dominated FIG with deals for Qatar Islamic Bank, Qatar International Islamic Bank, Abu Dhabi Islamic Bank and others, and it was ubiquitous in Saudi Arabian deals both in riyals (Olayan Real Estate Company, Tasnee, SABB and – at a mighty SR15 billion – General Authority of Civil Aviation (GACA), the first government-guaranteed sukuk from Saudi), and dollars (Saudi Electricity Company, the largest international DCM issue in any form from Saudi Arabia).
Apart from being big, well-run deals, many of these have a broader importance in the development of Islamic finance in future. Turkey’s deal, the first for that country, creates a benchmark for other Turkish corporates and government-related entities. The success of the GACA deal is important for the development of Saudi domestic sukuk by the country’s government-linked bodies and companies, while Saudi Electricity should have the same effect for Saudi issuers internationally. HSBC-led deals pushed tenors out to 10 years in the Saudi Electricity and Dubai deals.
It’s a sign of the market’s faith that HSBC appeared on every single sovereign sukuk transaction during our review period – it has appeared on every sukuk from Qatar and Indonesia, for example – and was involved in the development of the sukuk law that made Turkey’s debut possible in the first place. We can see the logic for HSBC exiting some of its Islamic finance businesses, but it should give up this position of leadership at its peril.
