Forty percent of Islamic countries' bonds are sukuk

Dirham coins sukukSukuk accounted for almost 40% of bonds issued in major Islamic economies in the first quarter, the highest proportion in the past eight years. Combined sukuk issuance in the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan was more than $11 billion in the three-month period, found the research by ratings agency Fitch Ratings. Sukuk, which are sharia-compliant structures that mimic the returns of a conventional bond, seem to be making gains at the expense of traditional fixed income. Sukuk issuance in the quarter was up 21% compared with the corresponding period in 2015, while conventional bond issuance in the same countries fell 45% over the same time span. "The data reinforces a trend of gradually increasing use of sharia-compliant borrowing as more countries create legal frameworks to support issuance and as issuers attempt to attract a broader investor base, including Islamic finance investors," said Fitch, in a statement. Sovereign and supranational entities such as the Indonesian government and the Islamic Development Bank were the largest issuers in the first quarter. The ratings agency says these entities will remain the dominant issuers, though banks and corporates could play more of a role as low oil prices continue to dry up banks' liquidity. ©2016 funds global mena

Executive Interviews

EXECUTIVE INTERVIEW: A natural interest in the topic

Mar 08, 2017

Since 2016, Guillermo Ortiz has been a chairman of Latin America’s BTG Pactual. The former central banker of Mexico talks to Nick Fitzpatrick.

We’ll launch our first equity fund next year

Dec 08, 2016

Not many banks plant olive trees, but the Bank of Palestine has a social mission. It also has ambitious expansion plans, says chairman Hashim Shawa. He talks to George Mitton.



Mar 08, 2017

The move to a three-day settlement cycle, the appearance of new stock exchanges, and recent rules on hedge funds were discussed by our panel in Cape Town. Chaired by George Mitton.

ROUNDTABLE: Growing pains

Mar 08, 2017

Our panel in Qatar spoke about frustration with regulators, a shortage of listed companies and plans for a new financial city in Doha. Chaired by George Mitton.