IIFM Publishes its Annual Sukuk Report: Key trends and dynamics of Sukuk issuances across the globe

Manama,  20th July 2017 – The International Islamic Financial Market (IIFM) announced the publication of the 6th editon of its annual Sukuk Report today. The research report provides invaluable information on the trends and prospects of the global Sukuk market, structural preferences and key developments. 

The report finds that the global Sukuk issuances during the year 2016 stood at USD 88 billion, which is an increase of 44% over 2015 primary market Sukuk issuances of USD 61 billion. 

The research notes that currently 86% of the USD 367 billion outstanding Sukuk are issued from  just a handful of key markets, namely Malaysia, Saudi Arabia, UAE and Indonesia while other countries like Turkey, Pakistan and other regions such as Africa in particular will gradually increase their market share in the coming years.
 
The study identifies the maturing global Sukuk (with issue size of USD 100 million and above with tenor of more than a year) during 2017 and 2018 will be around USD 66 billion. Considering investors appetite and Sukuk issuances in the pipeline, these maturing Sukuk will likely be refinanced with new Sukuk.

A positive trend which has emerged from the research is the continued growth in sovereign, and quasi-sovereign Sukuk issuances and given the development requirements as well as continued interest in Islamic finance from new jurisdictions; the outlook for Sukuk is encouraging.

The report also covers case studies on landmark Sukuk issuances in IIFM member countries and article contributions from key stakeholders on topics ranging from Sukuk listing, rating, regulation, market perspective as well as potential in new regions and jurisdictions.
 
“Sukuk have been issued for fulfilling the varied financing needs of the issuers such as enhancement of banks’ capital base, monetary and budgetary management, project financing, aircraft financing etc. which is an encouraging sign,” said Mr. Khalid Hamad, Chairman of IIFM. He added: “As the Sukuk market further evolves there is an increasing need for addressing the various challenges that come with the growth of any financial instrument and should be tackled by creating greater transparency and harmonization in documentation and product structures from Shari‘ah, legal and market perspectives.” 

 “There is growing confidence in Sukuk market in some of the established Sukuk issuing hubs, proof of which is, longer dated Sukuk ranging from 30 years to perpetual issuances coming to the market,” said Mr. Ijlal Ahmed Alvi, Chief Executive of IIFM. He added: “Except Malaysia, the corporate Sukuk issuances in most of the established jurisdictions is below expectation and challenges have to be resolved to support greater Sukuk issuance by corporate entities”.

Mr. Alvi acknowledged the support of the IIFM Board of Directors and member institutions. He expressed his gratitude for the contributors of the report and in particular for Nasdaq Dubai, Bank ABC Islamic, Labuan FSA, Autoriti Monetary Brunei Darussalam and DDCAP Group for their support by means of sponsoring the 6th edition of the IIFM Sukuk Report.