GLOBAL:
The deputy CEO of RAM, Promod Dass, speaking at a recent interview in
Dubai, revealed projections that new global Sukuk issuances could reach
US$130-140 billion this year.
Sharing his views on the global Sukuk market, Dass said: “We are likely
to see more Sukuk being issued to support infrastructure development in
Malaysia and the GCC, as well as issuances by sovereigns. Our estimate
also takes into account the healthy growth of corporate Sukuk issuance in
Malaysia.”
He opined that on the back of Malaysia’s strong Sukuk market and Dubai’s
vision of becoming an Islamic economy, both states should seize the
opportunity to collaborate together in developing the Islamic finance
industry on a global scale. “Dubai and Malaysia are gateways to the
respective Middle East and North Africa and ASEAN regions, and there is
vast potential for cross-border transactions,” he highlighted.
According to Dass, most of the fundraising activities have flowed from
Malaysia to the GCC. He called for GCC investors to seek Sukuk from
Malaysia and the wider ASEAN region, drawing examples from the diverse
range of Sukuk structures that investors from both the GCC and MENA
region should take into consideration. Dubai’s aim of becoming a global
Islamic economic hub is expected to act as a strong catalyst for the
advancement of the industry. “In a landscape dominated by conventional
international financial hubs, it is great to see Dubai establishing
itself as another major hub for Islamic finance,” said Dass.
Geographically, RAM expects Malaysia to retain its leading position in
the global Sukuk market, estimated to command approximately a 70% share
in 2014. Innovative Sukuk transactions from a range of issuers such as
banks, independent power producers, toll-road concessionaires, property
and plantation companies, and a multitude of corporates from other
sectors, have kept Malaysia ahead of the pack.
Notable issuances remain to originate from Malaysia: for instance the
Malaysia Building Society’s structured covered Sukuk and Malaysia
Airports Holdings’ perpetual Sukuk – both of which have the distinction
of achieving world firsts in their respective categories. Based on its
steady track record, it is likely that Malaysia will again spearhead
growth of the global Sukuk market this year.
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