Monday, 27th July 2020, Manama, Kingdom of Bahrain – The International Islamic Financial Market (IIFM) announced today the launch of the 9th Edition of its annual Sukuk Report. The research report provides comprehensive information on global Sukuk issuances, types of issuers, Sukuk structures, case studies on select landmark issuances, articles on Sukuk market developments and prospects as well as country focused reports on IIFM founding member countries and major Sukuk issuing jurisdictions.
The research finds that the year 2019 saw the market close with a record Sukuk primary market issuance amounting to USD 145.70 billion resulting in an increase of around 18.32% in Sukuk issuances as compared to 2018.
The report identifies that as of December 2019, around 94% of the USD 551.44 billion Sukuk outstanding globally are issued from well established markets namely Malaysia, Saudi Arabia, Indonesia, United Arab Emirates, Turkey and Bahrain while other countries like Pakistan, Qatar, Oman and regions such as Africa in particular are gradually increasing their market share. Also, Sukuk (with issue size of USD 100 million or above and with tenor of more than a year) set to mature during 2020 and 2021 will be around USD 70.82 billion. Due to current tough economic conditions globally caused by the COVID 19 pandemic, maturing Sukuk particularly from sovereign issuers are likely to be refinanced with new Sukuk issuances while corporate and financial institutions may delay issuing new 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 Al-Hamad, Chairman of IIFM.
“At the time of publication of the report, the global financial markets are facing a great deal of uncertainty caused by the COVID 19 pandemic which may momentarily impact the Sukuk primary market. However, given the unique features of Sukuk, the environmental, social and educational financing requirements present a huge potential to be realized in the medium term,” said Ijlal Ahmed Alvi, Chief Executive of IIFM.
The report was launched at a webinar where an international panel of experts representing IIFM, International Islamic Liquidity Management Corporation (IILM), Bank ABC Islamic, Kuwait Finance House (Bahrain), Standard Chartered Bank, National Commercial Bank, DDCAP Limited and Clifford Chance LLP spoke on Sukuk issuances in the time of COVID 19, trends & expectations, buy-side and sell-side perspectives, opportunities in environment friendly Green Sukuk & socially responsible SRI Sukuk, use of securitization in structuring Sukuk and IIFM’s Sukuk Al Ijarah and Sukuk Al Mudarabah standard documentation initiatives.
In his Welcoming Address, Datuk Danial Mah Abdullah, Director-General of Labuan FSA and Vice Chairman of IIFM said, “The IIFM Sukuk Report series, which was first launched in 2010, has become an important benchmark publication, providing useful information on the global Sukuk market, structure trends, key developments and prospects with case studies and articles. This flagship Report serves as part of IIFM’s mandate to facilitate Shari’ah harmonization through introducing and developing Shari’ah-compliant standard financial contracts and product templates relating to the Capital & Money Market, Corporate Finance and Trade Finance segments of the Islamic Financial Services Industry.”
The webinar launch event was attended by more than 150 participants from financial institutions, multilateral institutions, regulatory bodies, stock exchanges, law firms, accounting & business advisory firms and educational institutions from around 20 countries.
Mr. Alvi acknowledged the continuous support of Central Bank of Bahrain, Securities Commission Malaysia, Bank Indonesia, Autoriti Monetari Brunei Darussalam, Capital Markets Board of Turkey and State Bank of Pakistan in verification of Sukuk issuance data. He also thanked the market players who shared their knowledge by contributing write-ups in the report and particulalry Bank ABC Islamic, DDCAP Limited, National Bank of Kuwait and Labuan FSA for their sponsorship support.