As business activity picks up after the summer, we offer a summary of some of the stories we're following at the Arab Bankers Association.
IIFM Publishes Global Sukuk Report
The Sukuk report has data on sukuk issuance from 2001 to 2016, and includes data specific 2016 and other recent years so that trends can be seen.
Sukuk issuance in 2016 totalled $88,279mnn, of which $56,718mn was domestic and the remainder internationoal. Sovereigns were the main issuers.
The report also details the type of instrument used during 2016: for example, 77% of international issuance was under Wakala structures, while most domestic issuance was under Ijarah or Murabaha.
The data is not set out as well as it could be, and is confusing at times, but nonetheless, its provides a good breakdown of issuance by country of origin,type of issuer, and type of instrument.
The report also describes in detail how some of the more significant sukuks were structured during 2016.
The full report can be seen on the IIFM's website www.iifm.net. A summary of some of the data in the report is attached below.
The International Islamic Financial Market (IIFM) that publishes the report, is based in Bahrain and drafts standard financial contracts that can be used by Shari'ah-compliant banks (essentially replicating the economic effect of instruments such as interest rate swaps through Shari'ah-compliant instruments).
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Fitch downgraded the Republic of Lebanon to CCC on 23 August, the same day that S&P affirmed its B- rating and negative outlook. The ABA's Editor, Andrew Cunningham, considers the different views on Lebanon's financial health. The views are his own, not necessarily those of the ABA.
This is an important report, and one of its findings is that those who use Islamic finance say that they have a good experience.
A change in Jersey's tax legislation has clarified that commodity murabaha contracts that are used to strcuture Shari'ah-compliant transactions will not be subject to Jersey tax.
The Directors and staff of the Arab Bankers Association send best wishes to members and their families on the occassion of Eid el-Adha. The holiday was due to begin in most countries on 12 August and will last for four days.