Sukuk being the term used for bonds issued according to Islamic Sharia law has gained record heights and popularity in the global financial market. The Sovereign issuance was the main element that has worked as a catalyst for the Sukuk Market in 2011. Where it reached a total of USD 59 billion, while it was also seen that company’s issuance reached USD 19 billion, said Kuwait Finance House Research in its monthly report making it a major role player for Sukuk in the Middle Eastern region.
The global Sukuk secondary market has also shown growth in the number of issuance and investments it has also reached an all time high of USD 178.2 billion by the end of 2011, a 24% increase from USD 143.3 billion stands outstanding at the end of 2010.
While on a monthly basis the issuances dropped below the yearly average which was a quiet month for issuances of Sukuk made outside of Malaysia. However the primary market was still subjected to have recorded a yearly increase of 0.7% for December last year that continued a positive momentum in investments.
There were many noticeable investments included in the Middle Eastern region among the notable issuances for the last month were the Horizon Sukuk, issued under an SPV on behalf of the Gulf International Bank. The Sukuk was issued through the Cayman Islands that raised USD 300 million from only through the international investors. Another largest issuance for the month was the third issuance of the year for Pakistan Domestic Sukuk Company Limited that was issued on behalf of the government.
The USD 781.1 million Sukuk Al-Ijarah was also structured according to three year tenure. The vast majority included in the primary market issuances were shifted to the market in Malaysia and it domiciled in Malaysia too, the remaining Sukuk leading investments included only one Sukuk each arising from Pakistan playing part for the South Asian region and Bahrain typically known for its stable secured financial investment, while Gambia saw its largest issuance yet since the year 2001 that was of USD 18.9 million for the last month. The market was driven by individual sovereign issuances that were summed up to have collected revenue amounting to USD 4 billion while corporate issuances were at a three month low revenue.