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GLOBAL:
Riding on the back of strong growth in the first quarter, Kuwait
Finance House Research (KFHR) expects this year to be another
record-breaking year for primary market issuances. The research arm of
Kuwait Finance House conveyed a positive outlook on the global Sukuk
market as the number of jurisdictions, multilateral bodies as well as
categories of issuers tapping the Islamic debt market continue to
expand.
According
to a recent report by KFHR, new issuances in the global primary Sukuk
market recorded strong growth in the first half of the year, expanding
by 8.2% to reach US$66.2 billion compared to US$61.2 billion in the
corresponding period last year. In the second quarter, a total of
US$35.1 billion in new Sukuk were issued – the third-highest quarterly
figure on record since the second quarter of 2012. Although issuances
were geographically diverse, Malaysia continues to command the largest
market share, accounting for 63% (US$41.7 billion) of the total global
new Sukuk issuances in the first half.
In
terms of issuer type, sovereign issuers continued to lead the market in
the second half of 2014 with an issuance volume of US$20.6 billion from
US$21.37 billion in the first half. The corporate Sukuk sector
accounted for a sizeable 27.1% (US$9.5 billion) share of the primary
market in the second quarter of the year compared to 18.4% (US$5.7
billion) in the previous quarter; recording their second-highest
quarterly performance the last two years since the first quarter of
2012. Corporate issuances were mainly from the financial services, real
estate as well as power and utilities sectors.
The
robust expansion in the primary market during the second quarter of the
year has supported expectations that the annual new issuance volume for
2014 is on track to overtake last year’s volume of US$119.7 billion.
For the second half of 2014, debut sovereign issuances are expected
from Luxembourg, Hong Kong, Senegal and the emirate of Sharjah, with
debut sovereign issuers including Tunisia, South Africa, Oman, Jordan,
Egypt and Mauritania.
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