LABUAN:Malaysia remains the largest issuer of domestic sukuk at 72 per cent by value with the balance split between a number of other issuers such as Sudan, Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Brunei, Pakistan and Indonesia.(source)
However, for the short-term sukuk market (maturity of one year or less), Sudan is the leader in domestic sukuk issuances, followed by Bahrain, Brunei and Malaysia.
Chairman and Chief Executive Officer of the International Islamic Financial Market (IIFM)Ijlal Ahmad Alvi said as far as the domestic sukuk market is concerned, Malaysia has the lion’s share in terms of both volume and value.
He said the appetite for short-term sukuk is much greater than that for the longer tenure as witnessed by most issuers.
"The trend towards issuing shorter tenure sukuk is slowly increasing and is again driven by sovereign issuers through central banks," he said at the launch of the second edition of the International Islamic Financial Market (IIFM) Sukuk Report in Labuan today.
Ijlal Ahmad said Malaysian corporate issuers are also active and have provided diversity to the local market plus depth, which is required for a developed capital market.
Bahrain has been the most active market within the Gulf Cooperation Council (GCC) region, and is a regular issuer of short-term Sukuk Al Salam and Sukuk Al Ijarah offerings, which are always oversubscribed.
"It is the first government in the GCC to use sukuk as one of the primary tools for raising finance," he said.
He also said that the future outlook for short-term paper is encouraging and the Saudi Bin Laden Group has shown the way for other corporate issuers from the GCC region to enter the short end of the market.
"Moreover, it is expected that Bahrain, Brunei, Sudan plus several new entrants, will contribute to the development of the short end of the market," he added.
Meanwhile, according to the second edition of the International Islamic Financial Market (IIFM) Sukuk Report, Khazanah Nasional Berhad (Danga Capital Berhad), has been quite in the international sukuk market.
The Khazanah Singapore Dollar (SGD) sukuk comprises two tranches, a five-year tranche of S$600 million and a 10-year tranche of S$900 million due in 2020.
This sukuk, equivalent to a massive US$1.1 billion, achieved several milestones.
Among them are being both the largest and longest term sukuk issuance in Singapore, the largest Singapore dollar issuance by a foreign issuer in the city state and the first Singapore dollar sukuk issuance out of the Malaysia International Islamic Financial Centre.
The sukuk have an indicative profit rates of 2.615 per cent per annum for the five-year tranche and 3.725 per cent for the 10-year tranche.
The IIFM report is aimed at meeting the needs of players in the global-domestic and international - sukuk markets by providing them with useful information on the latest developments of sukuk in terms of type, geography and structure.
The report which has the strong support of various international financial bodies, particularly in Malaysia, also covers information and relevant details of sukuk issuances from January 2001–December 2010.
The IIFM has also added several new features such as country focus (Indonesia), global sukuk overview, short term sukuk, fixed profit rate trend, structural trends and sukuk challenges.
The report is useful for investors, governments, Islamic financial institutions, decision-making and policy formulation. - Bernama
- July 7, 2011
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