Global sukuk issuances hit $114bn over 11 months in Kuwait

Between January-November 2014 , the global primary sukuk market recorded total issuances of USD 114.7 billion, compared to USD 105.7 billion in the same period last year, a Kuwait Finance House (KFH) report showed here on Sunday.
Moving forward, an important supporting factor for sukuk issuances are the major infrastructure needs in the GCC, South Asia, South East Asia and Africa, the report said.
Sukuk has played a pivotal role in infrastructure financing and has been utilized for both public and private projects. Over the 11-month period, a total of USD 95.1 billion worth of infrastructure sukuks have been issued by more than 10 different countries, it added.
Islamic financial institutions (IFIs) globally are working towards full-compliance with Basel III; in this regard, recent sukuk issuances by IFIs in the GCC and Malaysia suggest that Basel III-compliant sukuks are a viable mechanism to meet the enhanced capital adequacy and liquidity standards, the KFH report indicated.
The growth in sukuk issuances was accompanied by a deepening of the sukuk market, with issuers from 19 different countries tapping the market this year; including landmark issuances from sovereign entities in the Middle East, Africa and Europe, it added.
On the whole, 19 countries tapped the sukuk market this year, compared to 18 countries in 2013; reflecting mainly debut sukuks by the governments of the UK, Hong Kong, Senegal, South Africa, the Emirate of Sharjah, Luxembourg and Pakistan, it showed.
Malaysia continued to dominate the sukuk market, accounting for a 64.6 percent share of total issuances; with Saudi Arabia (10.3 percent), Indonesia (5.4 percent), the UAE (5 percent) and Turkey (3.6 percent) rounding up the top five markets. Notably, the sukuk market is more geographically-dispersed this year, which is a healthy sign of expansion into new markets, the top five countries accounted for around 89 percent of total issuances, down from 95 percent last year, it added.