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| Source: IIFM website. The IIFM sukuk report for 2018. |
Launched at a May IIFM seminar organised by IIFM and hosted by Labuan IBFC, the report examines the development, structural preferences and drivers of the international and domestic sukuk market in recent years with a special focus on 2017. The report also provides an overview of the trends and prospects of the sukuk market and highlights major issuances around the world in 2017.
The report suggests that Malaysia with its deep capital market retained its position as the top sukuk issuer over its peers from the Far East and the Gulf Cooperation Council (GCC). In comparison, Indonesia's issuances total US$63 billion while KSA issued US$95 billion. The UAE had US$68 billion in issuances.
Labuan Financial Services Authority Director-General Danial Mah Abdullah said, “Malaysia has always played an important innovative role in Islamic financial services, boasting a comprehensive regulatory framework for Islamic banking, finance, takaful and asset management.
“As an extension and in support to this, Labuan IBFC has also been an innovative bed for Islamic financial products. For instance, the introduction of waqf embedded within a private foundation set up as a wealth management structure, through the Labuan International Waqf Foundation is a classic example of this innovation from Labuan IBFC. It is also home to the world’s first US-dollar denominated exchangeable sukuk. These have contributed to Malaysia’s position as the global leader in sukuk issuance.”
Ijlal Ahmed Alvi, Chief Executive of IIFM commented, “Barring Malaysia, the corporate sukuk issuances in most of the established jurisdictions is below expectation and challenges including legal and policy issues must be resolved to encourage more sukuk issuances by corporate entities.
“There is a degree of confidence in both established sukuk issuing jurisdictions as well as new jurisdictions entering the sukuk market which is evident from longer-dated sukuk ranging from 30 years to perpetual being issued.”
In his opening remarks, Danial said that the seminar is an excellent opportunity to build greater awareness and enhance understanding on the standardisation efforts spearheaded by the IIFM. Danial said, “The standards published by the IIFM have brought tremendous benefits to the industry by reducing legal and shari'ah compliance related costs, strengthening risk management capabilities, increasing efficiency, promoting shari'ah harmonisation and encouraging law reforms.
“These standards are not only utilised by financial institutions which are active in Islamic finance markets in the GCC, Africa, Asia and Europe but also by the regulators as reference for providing Shariah-compliant facilities to Islamic financial institutions in their respective jurisdictions.”
Chairman of IIFM Khalid Hamad said, “IIFM, in publishing shari'ah-compliant standard documentation and product confirmations for the Islamic finance wholesale market, is assisting in creating a transparent and robust industry and I expect the leadership of Islamic banks as well as the regulators to encourage the use of IIFM standards in their jurisdictions which will further enhance efficiency, reduce costs, promote best market practice and serve in the unification and harmonisation of the industry.”
Labuan Financial Services Authority Director-General Danial Mah Abdullah said, “Malaysia has always played an important innovative role in Islamic financial services, boasting a comprehensive regulatory framework for Islamic banking, finance, takaful and asset management.
“As an extension and in support to this, Labuan IBFC has also been an innovative bed for Islamic financial products. For instance, the introduction of waqf embedded within a private foundation set up as a wealth management structure, through the Labuan International Waqf Foundation is a classic example of this innovation from Labuan IBFC. It is also home to the world’s first US-dollar denominated exchangeable sukuk. These have contributed to Malaysia’s position as the global leader in sukuk issuance.”
Ijlal Ahmed Alvi, Chief Executive of IIFM commented, “Barring Malaysia, the corporate sukuk issuances in most of the established jurisdictions is below expectation and challenges including legal and policy issues must be resolved to encourage more sukuk issuances by corporate entities.
“There is a degree of confidence in both established sukuk issuing jurisdictions as well as new jurisdictions entering the sukuk market which is evident from longer-dated sukuk ranging from 30 years to perpetual being issued.”
In his opening remarks, Danial said that the seminar is an excellent opportunity to build greater awareness and enhance understanding on the standardisation efforts spearheaded by the IIFM. Danial said, “The standards published by the IIFM have brought tremendous benefits to the industry by reducing legal and shari'ah compliance related costs, strengthening risk management capabilities, increasing efficiency, promoting shari'ah harmonisation and encouraging law reforms.
“These standards are not only utilised by financial institutions which are active in Islamic finance markets in the GCC, Africa, Asia and Europe but also by the regulators as reference for providing Shariah-compliant facilities to Islamic financial institutions in their respective jurisdictions.”
Chairman of IIFM Khalid Hamad said, “IIFM, in publishing shari'ah-compliant standard documentation and product confirmations for the Islamic finance wholesale market, is assisting in creating a transparent and robust industry and I expect the leadership of Islamic banks as well as the regulators to encourage the use of IIFM standards in their jurisdictions which will further enhance efficiency, reduce costs, promote best market practice and serve in the unification and harmonisation of the industry.”
Details:
Download the IIFM Annual Sukuk Report 2018 (PDF)