A record first quarter for #Sukuk

Issuance of Sukuk is up all around the world, up on last year, due to current economic factors and the goodwill for the instrument among global investors
The good news on the Sukuk front is continuing. The proportion of Sukuk bond issuance hit a record in the first quarter of 2016 in the main markets for this form of finance, said Fitch Ratings. According to Fitch’s data, there is a clear upwards trend in use of Shari'ah-compliant borrowing as more countries create legal frameworks to support issuance and as issuers try to attract a broader investor base, including Islamic finance investors.
Total new Sukuk issuance in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was around $11.1 billion in the first quarter of 2016, with a maturity of 18 months. Issuance was up 22% from the fourth quarter of 2015 and 21% from a year earlier, while non-Sukuk bond issuance of $17.1 billion was down 23% quarter on quarter and 45% year on year. Sukuk represented 39.3% of total bond and Sukuk issuance in these countries during the quarter—the highest proportion in the past eight years.
Malaysia in specific is a large part of the uptick in issuance. According to RAM Ratings, there has been a 50.5 per cent jump in Malaysian Sukuk issuance to MYR 22.8 billion in the first two months of 2016. In comparison, in the first two months of 2015, Sukuk issuance reached only MYR 15.1 billion.
The Malaysian issuance has made a significant contribution to global Sukuk issuance figures. In fact, the top three Sukuk global issuers in February 2016 were all Malaysia-based, according to RAM Ratings, being Danga Capital Berhad ($2.3 billion), International Islamic Liquidity Management ($1.3 billion) and the Government of Malaysia ($1.1 billion). A total of $8.9 billion of global Sukuk was issued in February, which brought year-to-date issuance to $12.3 billion by the end of the month.