Photo: Essa Kazim (centre), board member of NASDAQ Dubai and Secretary-General of the Dubai Islamic Economy Development Centre, launching the State of the Global Islamic Economy 2019/20 report on Oct 11, 2019 at NASDAQ Dubai. Photo NASDAQ Dubai

Islamic Finance

Sukuk market prepares for new phase of growth - NASDAQ Dubai

This article is produced and sponsored by NASDAQ Dubai. It was first published in the State of the Global Islamic Economy 2019/20 report produced by DinarStandard and supported by the Dubai Islamic Economy Development Centre. The report can be downloaded from here

The global Sukuk market has grown strongly in 2019 so far and looks set for further development and maturity, with new trends in issuance emerging and new entrants preparing to join the market. As one of the world’s largest venues for Sukuk listings, Dubai has attracted some interesting issuances during the year and looks forward to hosting many more.

The emergence of Sukuk that meet Environmental, Social and Governance (ESG) criteria is a notable and welcome feature of the market. Nasdaq Dubai listed its first green Sukuk in February, in the form of two instruments of 1.25 billion US dollars and 750 million US dollars issued by the government of Indonesia for projects including sustainable development initiatives. This was followed by Dubai-based Majid Al Futtaim listing the world’s first benchmark corporate green Sukuk of 600 million US dollars in May. With investors around the world increasingly prepared to pay a premium for ESG-compliant assets, more Sukuk issuers are likely to join the sector. Nasdaq Dubai is well placed to support such a trend with its strong links to international investors, backed by the Green Bond Best Practice Guidelines issued by its regulator, the DFSA.

Other factors too are propelling the development of the Sukuk market. An increase in sovereign issuance has played a strong role in the 34% jump in global Sukuk issuance to 113 billion US dollars in the first 8 months of this year, compared to the same period in 2018, according to S&P Global Ratings figures. As noted by Moody’s investors Service, Egypt set up a Sharia’a supervisory committee in April to oversee Sukuk issuance. Moody’s added that a number of African sovereigns are likely to enter the market as issuers for the first time.

Nasdaq Dubai stands ready to support these and other issuers, adding to the healthy flow of Sukuk listings that we have attracted so far in 2019. These have come from a wide range of issuers that all appreciate the high global visibility and worldwide investor links that we provide as the region’s international exchange. As well as the Indonesian listings, our Sukuk from non-UAE issuers this year include two issuances by the Islamic Development Bank and one by Warba Bank of Kuwait. Issuances from leading UAE entities have come from the government of Sharjah, DP World, Dubai Islamic Bank, Emaar Properties, Majid Al Futtaim and Sharjah Islamic Bank.

By value, 56% of our listings this year have been from overseas issuers and 44% from UAE issuers, reflecting our international as well as local role as an exchange of choice. As we continue to streamline our Sukuk listing processes and procedures we are positioned for a growing pipeline of new issuances.


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