Jeddah, Kingdom of Saudi Arabia, 1 May 2023 – The Islamic Development Bank (IsDB) is fully committed to providing more depth to the Sukuk market with its AAA-rated benchmark size issuances every year and helping investors achieve their objective of promoting socio-economic development in the Bank’s Member Countries, says IsDB Vice President (Finance) and CFO, Dr. Zamir Iqbal.

He made the remarks while speaking in a webinar organized by the IsDB Treasury Department on “Sukuk Market Outlook and Investor Appetite” which also included a panel discussion by senior market experts who shared insights on the current state of the nearly US$ 900 billion Sukuk market, including recent trends and developments, and discussed the factors that are likely to shape its future growth.

The webinar, which attracted a diverse audience of professionals, investors, bankers, and analysts from around the world, was part of a six-session webinar series leading up to the 2023 IsDB Group Annual Meetings which are to take place in Jeddah, Kingdom of Saudi Arabia, from 10-13 May 2023, under the patronage of The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud.

Sharing the experience of IsDB, Dr. Zamir highlighted that the Bank has had more than 60 Sukuk issuances in the global capital markets, worth almost US$ 42 billion to date with roughly US$ 22 billion currently outstanding.

IsDB has taken important steps in showcasing its green and climate credentials, he said, including creating its Sustainable Finance Framework in 2019 in line with the global Green Bond Principles, the Social Bond Principles and the Sustainability Bond Guidelines that were published by the International Capital Market Association (ICMA).

Under the framework, IsDB has issued more than US$ 5 billion of Green Sukuk and Sustainability Sukuk issuances, mobilizing resources for positive climate action as well as improving social development (especially in the health sector) in its Member Countries.

“Moving forward,” he continued, “the Realigned Strategy of the Bank will cater to the increasing demand for financing green infrastructure, interventions for poverty alleviation and building resilience. This will result in a strong pipeline of eligible projects that can then be used as the underlying pool of assets for more Green and Sustainability Sukuk issuances in the near future.”

The keynote address was followed by an expert panel comprising Mr. Aissani Abdelouahab, Deputy Director at the Central Bank of Algeria; Dr. Mohamed Damak, Senior Director of Financial Institutions Ratings at Standard and Poor’s (S&P); and Mr. Karim Elzein, Head of Middle East, Türkiye and Africa (META) Debt Capital Markets at Société Générale. The panel was moderated by Mr. Mohammed Sharaf, Director of the Treasury Department of IsDB.

Mr. Aissani shared the investors’ perspective to the discussion and shared how Sukuk issuances have brought about more portfolio diversification opportunities in the fixed income space. Dr. Mohamed, from an industry watcher perspective, highlighted the major trends of global Sukuk issuances in the past couple of years and outlined the challenges that need to be tackled for future growth, especially in a volatile market backdrop, interest rate actions and efforts towards digitalization around the world.

Mr. Karim, from the Lead Manager and Arranger perspective, shared the general investor sentiment in the Sukuk market, both from the perspectives of traditional captive Sukuk investors as well as non-traditional conventional investors who have become very active in emerging markets. He also highlighted that currently, the demand outstrips the supply of Sukuk and, therefore, the growth potential is massive when considering that all types of issuers (sovereigns, FIs, etc.) are accelerating efforts towards individual, national and regional green/net-zero plans.

The webinar, which concluded with an interactive Q&A session, provided valuable insights into the current state and future prospects of the Sukuk market and highlighted the growing interest in Islamic finance among investors and stakeholders, especially from the perspective of ethical and socially responsible investment strategies as well as the potential for Sukuk to serve as an attractive alternative to conventional bonds.

The recording of the webinar can be accessed here.