Sukuk worth Dh26B set to mature in 2020-21
dubai — Around $71 billion (Dh260.6 billion) worth of Islamic bonds, also known as sukuk, with an issue size of $100 million or above and a tenor of more than a year, are set to mature in 2020 and 2021, according to the International Islamic Financial Market (IIFM).
“Due to current tough economic conditions globally caused by the Covid-19 pandemic, maturing sukuk particularly from sovereign issuers are likely to be refinanced with new sukuk issuances while corporate and financial institutions may delay issuing new sukuk,” the Bahrain-based
IIFM said in the ninth edition of its annual
It said global sukuk issuances jumped over 18 per cent to record $145.7 billion
(Dh534.7 billion) in 2019.
A number of UAE companies have issued sukuk lately. Last week, Dana Gas appointed Houlihan Lokey as its financial advisor for the dollar-denominated sukuk. Dubai
Islamic Bank has listed $300 million sukuk on Nasdaq Dubai and DP World also listed a
$1.5 billion Shariah-compliant bond on the
Dubai bourse, taking its total listing to over
$10 billion.
Dubai is one of the largest global centres for sukuk listings by value, totalling nearly
$72.6 billion.
“Sukuk’s commercial success should not lead us to ignore the underlying principles, which are its distinguishing factors when compared to conventional bonds. Sukuk are an innovative way to raise financing in a Shariah-compliant manner with link to the real economy,” said Khalid Hamad Al Hamad, chairman of IIFM.
The report identified that as of December 2019, around 94 per cent of the $551.44 billion (Dh2 trillion) sukuk outstanding globally are issued from well-established markets namely Malaysia, Saudi Arabia, Indonesia, the UAE, Turkey and Bahrain, while other countries like Pakistan, Qatar, Oman and regions such as Africa in particular are gradually increasing their market share.
“Global financial markets are facing a great deal of uncertainty caused by the Covid-19 pandemic which may momentarily impact the sukuk primary market,” said Ijlal Ahmed Alvi, chief executive officer of IIFM.
“However, given the unique features of sukuk, the environmental, social and educational financing requirements present a huge potential to be realised in the medium-term.”