2008 Sees Worst Decline in Sukuk Market, Improvement in Islamic Syndicated Lending, Says IFIS

IFIS published a report on 24 January discussed on Albawaba that Sukuk or Islamic bond markets have witnessed a dramatic decline during 2008, especially during the 4th Quarter, which was the lowest since 2002, and 2008 was a worse year for sukuk than both 2006 and 2007 with no issuances even of a Dollar Sukuk and the total amount dropping to only USD 584 mn in Q4 2008. South East Asia was more severely impacted than the GCC in 2008, with issuance falling by 76% down to USD 6.57 bn for the entire year. The decline in the GCC was quite severe as well, however, with issuance falling to USD 9.06 bn, a 51% drop. The global total for sukuk issuance, USD 15.77 bn, was 66% lower than the figure for 2007. This is the first year on year drop in sukuk issuance since the year 2000.

Islamic syndicated lending expanded from USD 19.6 bn in 2007 to USD 27.2 bn in 2008, a 32% increase. But as with credit markets worldwide, Islamic syndicated lending froze almost completely in Q4 2008.

Bookrunners and Arrangers: CIMB Islamic and HSBC Amanah, maintained their respective places on the top of the list. In syndicated lending, Al Rajhi Bank took the first place, jumping from sixth place in 2007. Noor Islamic Bank coming in second place,the market is more open to competition and true leaders in the syndicated lending market do not exist.

It appears that the syndication market lags behind the sukuk market. For both, IFIS does not expect a recovery before the recovery in the conventional markets.

IFIS 2008 Sukuk and Islamic Syndicated Lending Press Release[1].pdf50.64 KB