Maybank IB is top sukuk broker in 3Q19

The bank’s market share of the sukuk issued accounted for 56.3% of the total ringgit-denominated sukuk issuance in the period

by SHAZNI ONG/ pic by BLOOMBERG

MAYBANK Investment Bank Bhd (Maybank IB) emerged as the top sukuk broker for the third quarter of the year (3Q19), after helping to issue RM10.24 billion worth of sukuk in the market in the period.

Maybank IB’s market share of the sukuk issued accounted for 56.25% of the total ringgit-denominated sukuk issuance in 3Q19. The bank advised on 33 issues for the period, according to Bloomberg data.

Bank Islam Malaysia Bhd was the top broker in the first half of the year, advising on RM21 billion worth of issues including the RM27 billion raised by government-backed Urusharta Jamaah Sdn Bhd in May.

The bulk of the money raised in the 3Q was through the sukuk issued by DanaInfra Nasional Bhd, totalling RM2.5 billion.

Other notable Islamic debt issue deals Maybank IB advised on include the sukuk issued by Ipoh-based plantation group Kuala Lumpur Kepong Bhd (RM2 billion), Boustead Holdings Bhd (RM650 million) and Brecon Synergy Sdn Bhd (RM200 million).

Danajamin Nasional Bhd has guaranteed up to RM160 million of the first issuance of RM200 million Islamic medium-term notes (IMTNs) issued by Brecon Synergy, under its IMTN Programme of up to RM450 million.

The proceeds from the IMTN will be utilised by Brecon Synergy to part-finance the acquisition cost of King Henry VIII College in Cyberjaya.

Brecon Synergy’s principal activities are providing education services and other learning facilities for study and research.

The second-ranked advisor in the sukuk space in 3Q19 was CIMB Investment Bank Bhd, accounting for 20.59% of the league table share. The bank helped undertake 21 issues for the quarter, totalling RM3.75 billion.

Among its deals include DiGi.Com Bhd’s RM900 million issue, Prasarana Malaysia Bhd’s RM850 million raised and WCT Holdings Bhd’s RM617 million sukuk.

In September, WCT Holdings issued two tranches of Islamic debt papers, totalling RM617 million in nominal value under its newly established Perpetual Sukuk Musharakah programme.

The Islamic note programme allows the construction company to raise RM1 billion in nominal value. WCT Holdings stated that the proceeds raised may be utilised by the company, its subsidiaries, associated companies and/or jointly controlled entities.

The proceeds from the Islamic notes will be used to refinance existing borrowings, capital expenditure, asset acquisition, working capital, general corporate purposes and defray fees, costs and expenses incurred with the issuance of the notes.

The third-largest sukuk broker in 3Q19 was RHB Investment Bank Bhd, which had a market share of 5.91% and helped raised RM1.07 billion through 16 issues.

By sector breakdown, 35.54% of sukuk issued in the quarter were by financials, 17.54% by companies in the energy sector, 17.45% by corporates in the consumer staples space, 14.15% by government and the remaining by companies in the industrial, technology and other sectors.

For the nine months of the year (9M19), a total of RM55.34 billion worth of sukuk were issued in the market.

According to a Bloomberg report entitled “Islamic Capital Markets: League Tables, First 3Q19”, the market breakdown for domestic sukuk in 9M19 saw 73% of sukuk issued by financials, 7% by government, 5% by utilities and 15% by corporates in other sectors.

Maybank IB leads the table with a hand in RM24.87 billion of issuance, which accounted 44.94% of market share in 9M19. The bank advised 90 issues for the period.

CIMB Investment Bank came in second with RM11.52 billion issued via 63 issues. The bank also saw its market share dip 2.07% year-on-year (YoY) to 20.81% in 9M19 versus 22.88% in 9M18.

RHB Investment Bank saw its brokerage market share in the 9M19 drop to 10.43% YoY from 20.89% in the same period last year. The bank helped raise RM5.79 billion, advising on 54 issues.