IslamicFinance.de

A report issued by KFH-Research revealed that the global sukuk market recovered during the month of September last year to reach in its new issuances USD 7.8 billion - a 33pct growth. Malaysia still accounts for the largest share of the issuance where the Malaysian Ringgit came in first place in terms of the currencies that sukuk issued through. No sukuk were issued of the U.S. dollar in September. The most notable issuance during the month was by Saudi dairy and food firm Almarai Co. which completed the sale of a SAR1.7 billion (USD 453.1 million). Sovereign issuers made up 84.9pct of the primary market in September, while government related entities accounted for 4.0pct and corporates took the remaining 11.1pct. A total of 47 sukuk were issued in September vs. 55 sukuk in August and 66 in July.

A report issued by KFH-Research states that the global sukuk market has shown resilience this year given the volatility in global bond markets as market players react to positive economic growth prospects as well as concerns over monetary policy in the US. The report mentions that sukuk issuances have kept up momentum with over US$26.6 billion placed during the second quarter, which adds to the US$34.5 billion placed during the 1Q13 to bring the first half total to US$61.2 billion. On a monthly basis, the primary sukuk market in 2013 has outpaced the previous year every month since January 2013 except June 2013. Furthermore, the report adds that the HSBC/Nasdaq SKBI Yield Index shows that overall sukuk yields have risen sharply in 2Q13, with an increase of 43.0% to the highest level in over 25 months.

A report issued by KFH-Research states that the global sukuk market has shown resilience this year given the volatility in global bond markets as market players react to positive economic growth prospects as well as concerns over monetary policy in the US. The report mentions that despite rising yields across the board, sukuk issuances have kept up momentum. On a monthly basis, the primary sukuk market in 2013 has outpaced the previous year every month since January 2013 except June 2013. Moreover, the report states that Malaysia held the largest market share of the primary market in 1H13 primarily due to the central bank issuances. The secondary sukuk market in Malaysia remained the largest, followed by Saudi Arabia, the UAE and Qatar. Growth in the secondary market over the first half of the year was driven by Turkey. The prospects for the sukuk market are expected to remain bright.

KFH-Research issued a report stating that participation banks (Islamic banks) in Turkey form 5.2% of banking assets and will reach 10% by 2018, since those banks surpass the rest of the banking sector and have steady financing growth over 20% per year. The report noted that KFH-Turkey is first in deposits, and that participation banks are highly demanded and offer a wide array of products. There are currently four participation banks in Turkey, which are Albaraka Turk, Kuveyt Turk, Turkiye Finans, and Bank Asya. The low penetration rate of participation banking should ensure that its significant growth will continue over the coming years. Continuous measures and initiatives taken by the Turkish government as well as the large Muslim population will drive the participation banking sector to grow in the longer term.

KFH-Research issued a report that stated that Iran's Islamic banking assets contributed 42.7% of the total global Islamic banking assets in 2012, followed by PGCC (34.1%) and Malaysia (10.0%). The report expected that Islamic banking will continue to grow in the PGCC region during this year, and that it will manage to enter new markets worldwide, driven by growth factors and increasing demand. Islamic banking assets are expected to reach USD 1.5 trillion by end of this year with an accumulative growth rate of up to 20%. Islamic banking represents the largest market share (80.3%) in the Islamic finance total assets.

According to a report by KFH-Research, the Sukuk market in October demonstrated a month-on-month decline in terms of issuance of 24.5% to $8.8 billion. However, compared to last year, these figures show an increase of 61.3%. Sukuk issuance in the first ten months of 2012 totaled $112 billion, which is 59.4% higher than the corresponding period last year. It is even already 31.5% higher than the overall issuance in 2011. The expectations for the current year are for the issuance to reach $130 billion.

According to a report by KFH-Research, the volume of issuance of international Sukuk in July reached USD 12.9 billion. Since the beginning of the year, this amount is as high as USD 79.3 billion. A significant market expansion for the third consecutive month is observed. The total issuances so far for the current year mark an increase of 51.2% compared to the same period last year.