Global Sukuk Issues To Reach RM525 billions In 2015

KUALA LUMPUR –  The rising interest in Islamic financial instruments will help drive global Sukuk issuances to exceed US$150bil (RM525bil) in 2015 despite the uncertainty in the international market.

International Islamic Financial Market (IIFM) chief executive officer Ijlal Ahmed Alvi said that the target was achievable based on the sukuk issues in the pipeline. “The upward trend next year will also be helped by expectations of sustained demand from existing Islamic financial institutions and the Islamic bond issuances from various countries.

“In 2015 alone, we expect the global sukuk issuances to be more than US$30bil (RM105bil),” he said. Ijlal told Bernama this on the sidelines of the World Islamic Banking Conference 2014 held in Bahrain recently. Sukuk issuances for project financing would be healthy next year, where growth was expected to come from the Gulf Cooperation Council countries, the Far East and the African region for development works, he said.

He said the sukuk market would not be greatly affected by the normalisation of interest rates in the United States. “If the economy is doing well, I think issuers will be encouraged to issue sukuk,” Ijlal said. Sukuk issuances are considered to be the fastest-growing component of the activities constituting Islamic finance in general.

Total global sukuk issuances are likely to be in excess of US$130bil (RM455bil), and this would be the third year in a row that sukuk issuances would cross the mark set in 2012, according to IIFM’s fourth edition of sukuk report for 2014. It also said the total global sukuk issuances had grown by over 10 times to US$138bil (RM482.5bil) in 2013 from US$1.17bil (RM4bil) in 2001. For 2013, the international sukuk issuances amounted to US$26bil (RM91bil). 

Originally published o www.thestar.com.my