Manama: By Nayla Barakat: The International Islamic Financial Market (IIFM) announced the publication of the 8th Edition of its annual Sukuk Report. The research report provides useful information on the global Sukuk market, structure trends, key developments and prospects, case studies; articles and country focused reports on IIFM member countries.
The report reveals that global Sukuk issuances during the year 2018 stood at USD 123.2 billion, which is a modest increase of 5.5% over 2017 primary market Sukuk issuances of USD 116.7 billion.
The research notes that currently 90.44% of the USD 443.78 billion Sukuk outstanding globally are issued from few well established markets namely Malaysia, Saudi Arabia, UAE, Indonesia and Bahrain while other countries like Turkey, Pakistan, Qatar, Oman and regions such as Africa in particular are likely to gradually increase their market share in the coming years.
The study identifies global Sukuk (with issue size of USD 100 million or above and with tenor of more than a year) set to mature during 2019 and 2020 will be around USD 73.34 billion. Considering investors’ appetite and Sukuk issuances in the pipeline, these maturing Sukuk will likely be refinanced with new Sukuk issuances as has been the case in recent years.
A trend seen in the research is the continued growth in Sukuk issuances from sovereign issuers while the quasi-sovereign, corporate and financial institution issuances also remained stable contributing to an optimistic outlook for the Sukuk market.
The report includes selected case studies from industry experts on landmark Sukuk issuances during the year, articles on specific topics and recent developments from market perspective ranging from evolution in Sukuk market, Sukuk ratings, SME, Sukuk issuance for positive social impact and use of Blockchain and FinTech in Sukuk.
“Sukuk’s commercial success should not lead us to ignore the underlying principles which are its distinguishing factors when compared to conventional bonds. Sukuk are an innovative way to raise financing in a Shari’ah compliant manner with link to the real economy,” said Khalid Hamad Abdulrahman Hamad, Chairman of IIFM.
“IIFM’s current initiatives on standardizing Sukuk Al Ijarah and Sukuk Al Mudarabah suite of documentation will address some of the critical issues which surfaced in recent cases of Sukuk defaults and restructuring,” he added.
“Innovation is not only changing the dynamics of the Islamic finance industry but Sukuk market is also likely to benefit from technological advancements in the area of FinTech and blockchain technology,” said Ijlal Ahmed Alvi, Chief Executive of IIFM. He added, “It is pleasing to note that the new issuances also include environmentally friendly Green Sukuk, Socially Responsible Sukuk and blockchain related Sukuk.”
Mr. Alvi acknowledged the support of the IIFM Board of Directors and member institutions. He expressed his gratitude to the contributors of the report and in particular to DDCAP Group, Abu Dhabi Islamic Bank, Bank ABC Islamic and Labuan Financial Services Authority for their sponsorship support.
