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Thursday, 25th April 2024 |
| Sector set for continued growth |
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By: Gerard Scully, Gerard Scully
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| The debt listing sector of the Irish Stock Exchange has seen significant growth in recent years. Gerard Scully, head of debt listing at the Irish exchange, explains the recent developments in this area such as the listing of the first Islamic finance Sukuk in October last, and highlights reasons to be optimistic about the future. |
The debt listing function within the Irish Stock Exchange (ISE) enjoyed another successful year of growth in 2006, with a 49 per cent increase in the number of securities listed over the previous year with a total of 2,595 securities approved for listing. This built upon 2005 which also saw a 49 per cent rise in the number of debt listings over the previous year, increasing from 1170 to 1745. Steady progress has been maintained in the early months of 2007, and the debt listing function seems on course for another record breaking year. Growth in listings on the Exchange has led to an increase in the number of staff in the debt listings department to 24.
Geographical diversity
Debt listings on the ISE now encompass companies from every geographical region in the world. Latin American issuers, in particular Brazilian issuers, are now listing their debt securities in significant numbers. Examples of Brazilian companies that are listing their debt securities on the ISE include: Centrais Eletricas Brasileiras S.A. - ELETROBR?S, Sociedade Topo de Investimentos Brasil Ltda, Banco Votorantim S.A., Banco Daycoval S.A., Banco Panamericano S.A, Banco Pactual, Banco Mercantil Do Brasil S.A., Banco BBM S.A, Banco Schahin S.A. , Banco Pine S.A, Banco Industrial Do Brasil S.A, Banco do Brasil, SAG do Brasil S.A and COMPANHIA ENERGETICA DE SAO PAULO. Significant Mexican issuers who have listed their debt securities on the ISE include Groupo Gigante, AES El Salvador Limited and Cemex. This development of a positive relationship with Latin American issuers is reflective of broader business links which are being forged by Irish companies in the region through Enterprise Ireland.
In addition, the Exchange recently listed a security issued by a First Bank of Nigeria issuing vehicle, which was the first Nigerian issuance in the international capital markets in a number of years. We have some issuers from South African such as Standard Bank.
In the area of Islamic finance, the ISE listed its first Islamic finance Sukuk on October 18th, 2006. National Industries Company for Building Materials (NICBM) Sukuk Limited is a Cayman-based SPV issuing certificates backed by a musharaka (joint venture) agreement between itself and NICBM, a Kuwaiti manufacturing and building materials group. This is an ijara-type deal whereby repayments on issued certificates depend on the usufruct rights relating to four Kuwaiti factories transferred by NICBM to the musharaka. With significant infrastructural development in the Middle East, the area of asset backed Islamic finance represents a considerable opportunity for development for the ISE.
2006 also saw a significant number of US life insurance companies list their funding programmes on the ISE, including New York Life, Metropolitan Life, Jackson National Life and MetLife Insurance Company.
New listing agents
2006 also saw new listing agent operations opening in Dublin, with Maples & Calder and Kinetic Partners establishing operations. Both have already proved welcome additions to a thriving listing agent community.
Education initiatives
The securitisation Skillnets programme in conjunction with Financial Services Ireland ran nine successful seminars in 2006 with over 80 participants attending the courses. The educational programme for 2007 was launched by Kevin Cardiff of the Department of Finance at a very successful event held at the IBEC offices on Wednesday 4th April.
A broad range of topics were covered including an introductory model, valuations, accounting treatment and regulatory matters. It is now planned to run a graduate diploma in securitisation through DIT which will commence in September 2007. As was the case with the earlier seminars, the lecturers were drawn from the securitisation industry here in Dublin. This has been particularly favourably received by participants.
Areas of growth
The growth of the listing business, the establishment of the Irish Securitisation Forum and the growth in the securitisation business generally has served to attract other securitisation-related ventures to Ireland. Structured Credit Holdings plc, Wachovia Finance Ireland, Guggenheim and Capita are three companies which have established operations in Ireland in recent months.
The area of life insurance securitisation shows good potential for growth and a number of companies are actively looking at Ireland as a location for transactions in this sector.
Looking back over the last couple of years the pace of development both in listing on the Irish Stock Exchange and also the growth of Ireland as hub for the securitisation industry has been quite remarkable. There are no signs of this growth abating. Long may it continue. |
Gerard Scully is head of debt listing at the Irish Stock Exchange.
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