Sukuk on course for record-breaking year, says report

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Islamic bonds, or sukuk, around the world are expected to continue performing at record-breaking pace with Malaysia and the Gulf Corporation Council (GCC) countries leading the way.

According to Saudi Arabia’s National Commercial Bank (NCB), the sukuk market will burst past the US$100 billion barrier in 2012, surpassing the record $85 billion reached last year.

“Sukuk issuance this year appears on track for another all-time record with last year’s $85.4bn set to be comfortably exceeded even under the more cautious projects,” NCB said in its 25-page study on GCC equity markets.

“In view of current trends it appears likely that aggregate issuance will clearly exceed $100bn this year. Market innovation looks set to continue.”

The results of the study were published on Emirates 24/7 and said Malaysia was expected to remain as the world’s leading sukuk market in 2012, with the Southeast Asian country involved in 70 per cent of global transactions.

Sukuk in the GCC will remain strong, it said, despite falling in the first quarter of 2012 after a sharp rise in Q4 2011.

Malaysia’s sukuk issuance in 2011 was %58.7 billion compared to the GCC’s $19 billion. In Q1 2012, Malaysia issued $30.7 billion while GCC accounted for $8.6 billion.

The report said that GCC countries have the potential to eventually overtake Malaysia given its higher overall population (40 million to Malaysia’s 28 million) and the fact that the Middle East states spend more on infrastructure, which opens the way for wider sukuk issuance.

A feature of Cityscape Abu Dhabi, the Middle East Real Estate Summit brings together the biggest names involved in regional real estate investment, development and financing. A panel of more than 35 industry leading speakers currently active in the Middle East will share their collective experience and tackle the major challenges facing the regional real estate sector.

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Reading Time: 1 minute

 

Reading Time: 1 minute

 

 

Islamic bonds, or sukuk, around the world are expected to continue performing at record-breaking pace with Malaysia and the Gulf Corporation Council (GCC) countries leading the way.

According to Saudi Arabia’s National Commercial Bank (NCB), the sukuk market will burst past the US$100 billion barrier in 2012, surpassing the record $85 billion reached last year.

“Sukuk issuance this year appears on track for another all-time record with last year’s $85.4bn set to be comfortably exceeded even under the more cautious projects,” NCB said in its 25-page study on GCC equity markets.

“In view of current trends it appears likely that aggregate issuance will clearly exceed $100bn this year. Market innovation looks set to continue.”

The results of the study were published on Emirates 24/7 and said Malaysia was expected to remain as the world’s leading sukuk market in 2012, with the Southeast Asian country involved in 70 per cent of global transactions.

Sukuk in the GCC will remain strong, it said, despite falling in the first quarter of 2012 after a sharp rise in Q4 2011.

Malaysia’s sukuk issuance in 2011 was %58.7 billion compared to the GCC’s $19 billion. In Q1 2012, Malaysia issued $30.7 billion while GCC accounted for $8.6 billion.

The report said that GCC countries have the potential to eventually overtake Malaysia given its higher overall population (40 million to Malaysia’s 28 million) and the fact that the Middle East states spend more on infrastructure, which opens the way for wider sukuk issuance.

A feature of Cityscape Abu Dhabi, the Middle East Real Estate Summit brings together the biggest names involved in regional real estate investment, development and financing. A panel of more than 35 industry leading speakers currently active in the Middle East will share their collective experience and tackle the major challenges facing the regional real estate sector.

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