UNITED ARAB EMIRATES – IIFM releases 3rd edition of Sukuk report

June 2013

THE International Islamic Financial Market (IIFM) released its much awaited IIFM Sukuk Report (3rd Edition) which consists of ‘A Comprehensive Study of the Global Sukuk Market’ on May 28, 2013. The research report sheds light on the growth and development of international and domestic Sukuk issuances from 2001 – Jan 2013.

Mr. Ijlal Ahmed Alvi, Chief Executive Officer of IIFM said, “The last two years were record years of Sukuk issuances which reached USD92.4 billion and USD137 billion in 2011 and 2012 respectively. This year has also started on a positive note and as per the report over USD11 billion worth of Sukuk was issued in January 2013 and the growth trend is expected to continue in coming years”.

The report also highlights the different Sukuk structures used by international Sukuk issuers as well as Sukuk structures used at domestic level by various jurisdictions active in issuing Sukuk.

The report also contains selected Sukuk case studies in the international Sukuk market providing deeper understanding of the mechanism and uniqueness of the most popular commonly used fixed profile instruments in the Islamic Capital and Money Market. “An interesting trend or innovation in Sukuk issuances also highlighted by this report is Sukuk issuance in non-local currency such as an issuer based in UAE issuing a Sukuk in Malaysian Ringgit and a issuer based in Malaysia issuing a Sukuk in Chinese Yuan etc., this is another positive development and will certainly further contribute in the development of the Sukuk market. The risk arising from currency or rate of return mismatches can be managed by Islamic hedging documentation and product standards being published by IIFM and ISDA and will provide further confidence to investors in Sukuk,” said Mr. Alvi.

Another salient feature of this report is the clarification on the meaning and types of Sukuk Al Istithmar (Investment Sukuk) in order to provide more beneficial information to the market.