Sukuk issuances jumped to $ 162 billion

Sukuk issuances jumped to $ 162 billion
Sukuk issuances jumped to $ 162 billion
The global sukuk market witnessed record issuances in 2019, recording $ 162 billion, an increase of 31% over 2018, according to Wadha Butti Al Ghafli, Director of Strategy and Planning Department at the Center for the Development of Islamic Economy.

Al-Ghafli added, during the fourth session of the virtual webinar series of the World Islamic Economic Summit, that according to the Global Islamic Economy Report for 2019/2020, the assets of Islamic finance worldwide reached $ 2.5 trillion in 2018.

She added, “Sukuk constituted 4% of these assets, and in the same year the UAE ranked fourth among the top 10 markets for Islamic finance assets in the world, with a value of $ 238 billion.”

The Dubai Center for the Development of Islamic Economy, in cooperation with the Dubai Chamber of Commerce and Industry, “Dubai Chamber” and within a strategic partnership with “Refinitiv”, is hosting this session of a series of electronic seminars to shed light on the opportunities and challenges in the sukuk market.

Moderated by Taher Mahmoud, Head of Business Development at Nasdaq Dubai, the session focused on discussing emerging trends in the sukuk market and future outlooks for the sector.

The session was attended by Ali Tawfiq, Director of Borrowing Capital Markets at HSBC Bank Middle East, Anjad Rajpal, Director of Fixed Income in the Asset Management Division at Emirates NBD, and Dr. Muhammad Damak, Senior Manager and Global Head of Islamic Finance at Standard & Poor’s International Credit Rating Agency.

Mohiuddin Kronfol was also the Chief Investment Officer of the Global Sukuk and Fixed Income Division in the Middle East and North Africa region at Franklin Templeton Investments.

Al Ghafli said that the rise in the global sukuk market is due to the growing sovereign issuances in the Gulf Cooperation Council countries, Malaysia and Indonesia, in addition to the significant increase in corporate issuances and the popularity of short-term issues and new instruments such as green sukuk.

She pointed out that the session was beneficial to all stakeholders in the Islamic economic sector, especially as sector experts spoke about the general impact of the Covid-19 epidemic on global sukuk issuance and the growing role of technology in the issuance process.

During the session, the participants agreed that the sukuk market had performed well last year, and Mohiuddin Kronfol indicated in this regard that the lack of updated data contributed to complicating the process of issuing sovereign and institutional sukuk and making them more expensive.

For his part, Damq talked about blockchain technology and its contribution to solving three problems facing the sukuk market today, namely the flexibility of embedded assets, the traceability of assets and the traceability of investors.

During the symposium, a questionnaire was conducted to survey the opinions of the participants and attendees about the most important factor in the continued growth and innovation of the sukuk market.

The survey revealed that 40% of the attendees believe that market infrastructure such as legislative frameworks and templates represent the most important factor in this context, while 21% of the respondents gave priority to new structures and structures that are in line with environmental and social issues, institutional governance and principles of responsible investment, and 19% vote for continuous government publications. And 7% for adopting innovative technology.

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