Global sukuk issuances surge 44% to $30bln in Q1

The upswing is attributable to a boost from Saudi Arabia

A total of $12 billion (Dh44 billion) worth of sukuk (Islamic bonds) was issued in March 2018, which brought global sukuk issuance to $30 billion (Dh110 billion) in the first quarter of 2018 – a 44.4 per cent surge from $20.8 billion (Dh76.3 billion) for the same period last year, according to RAM Ratings’ latest statistics.

The upswing was attributable to a boost from Saudi Arabia, whose issuances charted the highest growth, jumping to $6.5 billion as at end-March 2018 as compared to $184.8 million at the end of March 2017.

Malaysia accounted for the second-largest year-on-year increase, with issuances rising from $9.6 billion to $11.5 billion. This was followed by Indonesia ($5.5 billion), the UAE ($3.3 billion) and Turkey ($1.4 billion), the ratings agency said in a note.

Malaysia remained the market leader in global sukuk issuance, with a 38.2 per cent market share as at end-March 2018 – or $11.5 billion, 17.4 per cent of which was issued by International Islamic Liquidity Management (IILM). Saudi Arabia stayed in second place with a 21.7 per cent share ($6.5 billion) as at the same date, while coming next were Indonesia (18.2 per cent) and the UAE (10.8 per cent).

RAM Ratings observed that dollar sukuk issuance boosted the global sukuk market in Q1 2018, climbing 47.6 per cent year on year to $10.4 billion and accounting for 34.5 per cent of global sukuk issuance as at end-March 2018 as compared to $7 billion as of end-March 2017. The bulk of dollar sukuk stemmed from the UAE (31.3 per cent) and Indonesia (28.9 per cent), followed by Malaysia (22.4 per cent), Saudi Arabia (16.9 per cent) and Qatar (0.5 per cent).

Outstanding global sukuk had increased to $430.2 billion as at end-March 2018 from $326.3 billion a year earlier. Malaysia’s sukuk market remained the world’s largest, accounting for 49.5 per cent of outstanding global sukuk as at the same date.

According to Marmore Intelligence, a total of $174.17 billion was raised in the GCC bonds and sukuk market during 2017, an increase of 3.96 per cent over $167.54 billion raised in 2016. Out of this, $69.9 billion was raised by GCC central banks’ local issuances while $104.26 billion was raised by GCC sovereign and corporate issuances.

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