Global sukuk issuances jump 47% to USD 137bn in 2012 - IIFM

By bne IntelliNews May 29, 2013

Some BAD 52bn (USD 137bn) worth of Islamic bonds were issued in 2012, marking a sharp 47% y/y increase, the International Islamic Financial Market (IIFM) said in a new report. The reading reflects recovering investor interest and rising Islamic finance status. The key global sukuk issuers are the GCC states and Malaysia. Aggressive public spending in the GCC and other large Islamic states will thus help boost sukuk issuances in the near-to-medium term.

“This year has also started on a positive note and as per the report over BAD 4bn (USD 11bn) worth of sukuk were issued in January 2013 and the growth trend is expected to continue in coming years,” Ijlal Ahmed Alvi, Chief Executive Officer of IIFM, said.

The IIFM underscored the trend of sukuk issuance in non-local currency such as an issuer based in the UAE issuing a sukuk in Malaysian Ringgit and an issuer based in Malaysia issuing a sukuk in Chinese Yuan. “The risk arising from currency or rate of return mismatches can be managed by Islamic hedging documentation and product standards being published by IIFM and ISDA and will provide further confidence to investors in Sukuk,” said Alvi.

Funding needs and large infrastructure investments in the GCC region and Malaysia, coupled with better global investor sentiment, will help keep global Islamic bond issuances strong in 2013 as they are expected to exceed USD 100bn, Standard and Poor’s has recently said. Moreover, a number of banks will tap the sukuk debt market in 2013 to refinance existing debt and seek larger amounts to match the credit needs of their corporate clients, especially in project finance, S&P said. But despite strong growth, the sukuk debt market still reportedly constitutes a small segment of the global fixed-income world.

Related Articles

Lebanon becomes European Bank for Reconstruction and Development shareholder

Lebanon has become the fifth member country from the Southern and Eastern Mediterranean (SEMED) region to join the European Bank for Reconstruction and Development (EBRD), becoming a shareholder with ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

US lifts laptop ban on Turkish Airlines flights as of July 5

Passengers boarding an early morning July 5 Turkish Airlines (THY) flight to John F Kennedy International Airport in New York were allowed to include laptops and electronic devices larger than a ... more

Dismiss