HSBC AND DIFX LAUNCH SUKUK AND CONVENTIONAL BOND INDICES
HSBC and the Dubai International Financial Exchange (DIFX) have launched a family of indices which track price movements of conventional Middle Eastern bonds and international Sukuk (Islamic bonds).
The indices are grouped into three major categories: International Sukuk, Middle Eastern Conventional Bonds and Middle Eastern Aggregate, which include over 100 issues from the region, with data going back to 31st December 2004. In addition to these main indices, a variety of sub-indices have been launched, allowing investors to track various individual sub-sectors within the main indices, while also providing greater transparency into the booming Middle Eastern credit market.
The indices provide daily updated price and liquidity information about the market in Middle Eastern conventional bonds and international Sukuk. This will enable regional and international fixed income investors to make better-informed trading decisions based on a new benchmark. They will also facilitate the development of new index-linked investment products.
The indices provide daily updated information about prices in the secondary market using the HSBC bid-prices at the Middle Eastern close. They are available on Bloomberg, as well as on a dedicated website, to be viewed at either:
Armen V. Papazian, Head of Innovation and Development at the DIFX, said: “This is a milestone in the Middle East’s credit markets. For the Islamic finance industry in particular, it will go a long way towards increasing the liquidity in the Sukuk market. As the world’s largest exchange for listed Sukuk, we at the DIFX believe these indices will drive strong interest in the sector from issuers and investors. The DIFX believes that innovation in this sector is key to its success, and looks forward to playing a leading role in future credit market initiatives.”
Neil Foster, HSBC’s Regional Head of Global Markets, added:
“These indices will provide another catalyst for the Middle Eastern Credit and International Sukuk markets, both of which have already witnessed explosive growth in recent years. With an increasingly global investor base participating in these asset classes, the HSBC/DIFX Indices will provide much-needed transparency and hence lead to enhanced liquidity. The Indices mark a partnership between the first international bank to have established a dedicated Middle Eastern fixed income trading desk in the region, and the first international-standard exchange in the Middle East. As such, we believe they will swiftly be adopted as the benchmark by global credit investors in these markets.”