Thursday, 5th August 2020, Manama, Kingdom of Bahrain - The International Islamic Financial Market (IIFM) announced today the launch of the 10th Edition of its Annual Sukuk Report. The research report provides comprehensive information on global Sukuk issuances, types of issuers, Sukuk structures, case studies on select landmark issuances, articles on Sukuk market developments and prospects as well as country-focused reports on IIFM founding member countries and major Sukuk issuing jurisdictions. 

The research finds that the year 2020 saw the market close with a record total short term & long term Sukuk primary market issuances amounting to US$ 174.60 billion resulting in an increase of around 19.84% in Sukuk issuances as compared to 2019. The longer tenor Sukuk issuance supported by sovereign and financial institutions coupled with an increase in short-term issuances by various issuers resulted in maintaining the upward trend of the year 2019.

The report identifies that as of December 2020, over 90% of the US$ 648 billion Sukuk outstanding globally are issued from well established markets namely Malaysia, Kingdom of Saudi Arabia, Indonesia, United Arab Emirates, Turkey and Bahrain while other countries like Pakistan, Qatar, Oman, Nigeria, Egypt and regions such as Africa in particular are gradually increasing their market share. Also, Sukuk (with issue size of US$ 100 million or above and with a tenor of more than a year) set to mature during 2021 and 2022 will be around US$ 98.40 billion.

The report mentions that despite the unprecedented situation caused by COVID-19 during the year 2020, the impact of the pandemic was confined and limited to a few corporate issuers. Overall Sukuk remained an attractive instrument and the positive growth trajectory has continued during first half of 2021.

“There is an increasing need to address various challenges which come with the evolution of any financial instrument. These should be tackled by creating greater transparency and standardization in financial documentation and practices. I sincerely hope that issuers as well as the investors drive maximum benefits from Sukuk related standards published by IIFM and other standard setting organizations of the industry,” said Mr. Khalid Hamad Al Hamad, Chairman of IIFM. 

“While standardization brings the necessary unification, efficiency and transparency required for the advancement of the Sukuk market, it is also important that the industry stakeholders provide support for continued innovation in the Sukuk market particularly in the areas of Environment, Social & Governance (ESG) goals, Fintech and Waqf focused Sukuk. These factors present a huge potential that will play a major role in the development of Sukuk market in years to come,” said Mr. Ijlal Ahmed Alvi, Chief Executive Officer of IIFM.

The report was launched at a special online event where an expert panel of international speakers representing Islamic Development Bank, Labuan Financial Services Authority (Malaysia), International Islamic Liquidity Management Corporation (IILM), Kuwait Finance House, Standard Chartered Bank, Clifford Chance LLP, DDCAP Limited, Bedford Row Capital, Genesis Consulting and Istanbul Zaim University spoke on Sukuk issuances in the time of COVID 19, trends & expectations in Sukuk structuring, buy-side and sell-side perspectives, tangibility ratios, Sustainable Development Goals and the evolving Sukuk market as well as IIFM’s Sukuk Al Ijarah and Sukuk Al Mudarabah Standards.

In his keynote address, Mr. Nik Mohamed Din, Director-General of Labuan FSA and Vice Chairman of IIFM said: "The IIFM Annual Sukuk Report, now in its tenth year, has made significant contributions to the industry while IIFM standards including Sukuk documentation standards are playing an important role in harmonization of the industry”. He also spoke on the rise of sustainable investment following ESG agenda and transition into a clean environment, the role of Labuan IBFC and Malaysia in the development of Islamic capital market as well as technological advancements and innovations is the Islamic finance space.

In his special address, Dr. Zamir Iqbal, Vice President, Finance (Chief Financial Officer), Islamic Development Bank (IsDB), Jeddah, spoke about IsDB’s journey on the Sustainability Sukuk program and on the potential of ESG Sukuk in Islamic capital market.  He emphasized rapid developments fueling the demand for ESG-eccentric financial instruments which play a vital role in a sustainable and green post-COVID recovery. “This will offer attractive opportunities for Sukuk issuers to cater to growing demand,” he stated.

The webinar was attended by more than 250 participants from financial institutions, multilateral institutions, regulatory bodies, stock exchanges, law firms, accounting & business advisory firms and educational institutions from around 26 countries.

IIFM CEO, Mr. Alvi, acknowledged the continuous support of the Central Bank of Bahrain, Securities Commission Malaysia, Bank Indonesia, Autoriti Monetari Brunei Darussalam, Capital Markets Board of Turkey, Central Bank of Sudan and the State Bank of Pakistan in verification of Sukuk issuance data.

He also thanked IIFM research team, Sukuk case studies & article contributions from the leading financial institutions, the country focus reports from the member countries’ regulators and last but not least, the valuable support from the sponsors namely Eiger, GFH Group, Bank ABC Islamic, Dubai Islamic Bank, Kuwait Finance House and DDCAP Limited which made the production of this report possible.