Global sukuk issuance next year may surpass 2007’s record US$34bil
KUALA LUMPUR: The global sukuk issuance next year may supersede the all-time high of US$34.2bil recorded in 2007 based on an uptrend seen this year and the recovery in the global economy.
Amanie Business Solutions consultant Baiza Bain said the sukuk issuance this year was expected to be about US$30bil. He said the last few issuances had been oversubscribed and a similar trend was expected next year.
“The credit market now is much more at ease and there is a lot of interest from investors. Next year, sukuk issuance could be more than the figure quoted for 2007 but this depends on the global economic environment and also the US economy as well as the stability of its currency.
Dr Mohd Daud Bakar
“The bulk of the sukuk issuance in 2007 was in US dollar. Some corporations are reluctant to issue sukuk now due to the fluctuation of the dollar. If the dollar stabilises next year, we’ll see a lot more issuance,” he told a press briefing on the upcoming International Shariah Investment Convention yesterday.
Worldwide sukuk issuance in 2009 stood at US$23bil, up from US$19bil in 2008.
Amanie president and chief executive officer Dr Mohd Daud Bakar (pic) said elements of structured products were now being incorporated into sukuk as it helped render capital projection and certainty of return to investors.
“We expect this new trend in sukuk structuring to attract more investors. We have seen a couple of sukuk issuances using this new method this year,” he said.
Mohd Daud believed that renewed activity in the sukuk market would be the catalyst for the next cycle of growth, citing the recent US$200mil Islamic bond sale by Dubai-based Al Baraka Banking Group.
Organised by Amanie, the Securities Commission and Bursa Malaysia, the International Syariah Investment Convention will be held from Nov 30 to Dec 1 in Kuala Lumpur.
Local and international participants from regulatory bodies, fund management houses and investors will discuss key issues such as establishing proper cross border distribution channels for funds and continued expansion for the sukuk market.
Jungfraujoch, Top of Europe, Switzerland