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.
New Publications on the Sukuk market
Emirates NBD's new research paper on Sukuk was written by Anita Yadav, the bank's Head of Fixed Income Research. It addresses both the size of the market and also the investment opportunities and performance.
In terms of size, Yadav says that total sukuk outstanding are around $587bnm of which two thirds are denominated in domestic currencies and the remainder in international currencies, primarily US$s.
Internationally tradable sukuk stand at $197bn – having more than doubled over the last five years. Ninety seven per cent of this is denominated in US $.
Malaysia is hte largest sukuk issuer, with about $250 bn outstanding, nearly all of it domestic. Saudi Arabia is second with a little more than $100 bn outstanding, about two thirds of which is domestic, and Indonesia is third, with about $70 bn outstanding, split roughly 50-50 domestic-international.
Governments account for 58% of outstanding sukuk, corporates 24% and financial institutions 18%.
The report by the International Islamic Financial Market (IIFM) is the eighth that the organisation has produced. It runs to 186 pages and includes case studies of recent sukuk issuances, with descriptions of their structures, as well as articles by market practitioners.
A lot of the statistics in the IIFM report are for the period 2001 - 2018, which isn't very helpful, and IIFM's figures on sukuk outstanding must be based on different definitions to those used by Emirates NBD, because the numbers don't match up. However, the IIFM report does contain a lot of detail on individual issuers, enabling the reader to see who has been active in the market and the types of sukuk that have been used. The descriptive pages on the structure of sukuks are useful reference guides.
Both reports are attached below.
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