Sukuk Islamic Finance - Where Do They Sit?
A very niche question, but I'm interested in learning more about Islamic finance and opportunities surrounding it when I go into my internship at a US BB in 2023. Does anyone have an idea of where they sit? Sukuk in particular (Islamic bonds). I read on WSO that Sukuk bonds resemble ABS products, so would they be done in a bank's securitization team, or would they be done in the CEEMEA team?
Would really like some insight!
Thank you
bump
I think you kind of answered your question in the sense that if they are structured like ABS products, theyd be done by the securitization team that sits within EMEA. If you’re interested in pursuing a career there I’d suggest reaching out to people who work in those regions when you start
Oh that's a shame, I interned within a Securitization team and didn't see any of that and am returning to another Capital Markets desk instead (didn't get the return for securitization). But sure, might as well reach out, might be an interesting case study to read about I suppose.
Never seen Sukuk from anyone based out of anywhere but Dubai
Islamic finance is an interesting and growing field qnd apparently big banks have done deals all across EMEA, so thought maybe give it a shot of asking
Please tell me who thinks it's interesting and growing. It'll only be relevant to Islamic countries.
Let me deal with the disinformation here. A sukuk is a securitization of sorts but it is designed to be a plan vanilla deal, and is not handled in the securitization groups.
1. the structuring of Sukuk’s and the dealing with religious authorities is a relatively low margin product - some of the banks that do this are HSBC Amanah (Islamic finance arm), Standard Chartered Saadiq, Dubai Islamic Bank, First Abu Dhabi. There also boutique advisors. Don’t be fooled into thinking this has anything to do with religion; the leading boutique advisor is a Dutch Christian guy
2. Of any Sukuks of size, the distribution is done out of the CEEMEA (Centeal and Eastern Europe, Middle East and Africa) desks of the big banks - Citi, JP, HSBC, DB, BNP, etc. if you sit on these desks, even if only MENA focused, Sukuks will be a small part of what you do
3. There are specializing markets for Sukuk distribution like Malaysia and Saudi. These are very niche markets dominated by local banks (Maybank and CIMB for Malaysia, NCB, GIB, Alinma etc for Saudis). This is a niche within a niche.
bottom line - total niche business.
Thank you!
Great info all around.
In the grand scheme of things, Sukuk or Islamic finance are a microscopic space within the global finance industry. Since giving out loans/financing with interest are prohibited in Islam, we would just rename/restructure the interest payment as "profit sharing agreement". But other than some wording adjustment in the legal documents itself, it works no different than your vanilla bond.
Thanks!
I’d also go for the sovereign, supranational and agency desk if you happen to be in a DCM team, as most sukuk issuers will probably be governments / SOEs from the MENA region. If you can choose the team, that is.
Thank you, will consider!
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