Why the #sukuk market is soaring

Since its introduction in the 1990s, the sukuk market has grown significantly with no sign of slowing down. 2016 saw volumes rise by 15% year-on-year, bumping the average annual growth rate of the market to 18% since 2010. This puts sukuk growth during this period more than nine times the global bond market growth average. In 2017 sukuk volumes reached $49 billion so far. Sukuk has transformed from a niche product into an integral component of global capital markets. Product offerings have expanded beyond the traditional vanilla instruments to include capital securities in the bank tier 1 format, as well as industry-specific structures for the telecommunications sector. The market is expected to grow in three areas: financing opportunities on the back of China’s Belt and Road initiative, green (or socially responsible investment) sukuk and local currency sukuk.