$123.2 bn Sukuk issued globally in 2018

The International Islamic Financial Market (IIFM) announced at the weekend the publication of the eighth edition of its annual Sukuk Report, which finds that global Sukuk issuances during 2018 stood at $123.2 billion, representing a modest increase of 5.5 per cent over 2017 primary market Sukuk issuances of $116.7 billion.
The research notes that currently 90.44 per cent of the $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 $100 million or above and with tenor of more than a year) set to mature during 2019 and 2020 will be around $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 Sharia compliant manner with link to the real economy,” said Khalid Hamad Abdulrahman Hamad, Chairman of IIFM. He added, “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.”
“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.”
IIFM is a standard-setting body focusing on standardization of Sharia-compliant financial contracts and product templates relating to the Islamic Financial Services Industry (IFSI).
The Bahrain-based body serves as a neutral and non-profit infrastructure development institution.