Overview & Trends in the Global
Sukuk Market
2010
• Sukuk Emergence
2009
2002 >
2001
1990
1988
Sukuk Ruling
(The Fiqh
Academy of the
OIC )
Shell MDS
RM125 Million
Sukuk Issue
(based on BBA
structure)
Kumpulan
Guthrie $100
Million
Malaysian
International
Sukuk Issue
(Ijarah
structure)
Short-term
Ijarah Sukuk by
Central Bank of
Bahrain
International
Sukuk
Issuances in
Bahrain,
Pakistan,
Indonesia, UAE,
Germany,
Qatar, Saudi
Arabia
Sukuk Issuance
by IDB
First
International
Sukuk issued in
Indonesia
IFC Sukuk
$ 100 Million
KT Turkey Sukuk
Limited $100
Million
Sukuk issuance
by Japanese
corporate
GE Sukuk
$ 500 Million
1
Overview & Trends in the Global
Sukuk Market
• Total Global Sukuk Issuance
Sovereign, Quasi Sovereign & Corporate Issue (All currencies), Period 1st Jan 2001 – 31st Dec 2010
2
Overview & Trends in the Global
Sukuk Market
• Country-wise Breakdown of Total Global Sukuk Issuance by Volume
Sovereign, Quasi Sovereign & Corporate Issue (All currencies), Period 1st Jan 2001 – 31st Dec 2010
Country
Malaysia
UAE
Saudi Arabia
Sudan
Bahrain
Indonesia
Pakistan
Qatar
Kuwait
Brunei Darussalam
USA
UK
Singapore
Germany
Turkey
Japan
Gambia
Grand Total
Number
of Issues
1592
41
22
22
125
70
35
6
9
21
3
2
5
1
1
1
7
1963
Volume
(US $ Million)
115393.76
32201
15351.88
13057.713
6291.69
4658.5
3447.207
2500.79
1575
1175.91
767
271
191.96
123
100
100
2.086
197208.496
% of
Total Value
58.51%
16.33%
7.78%
6.62%
3.19%
2.36%
1.75%
1.27%
0.80%
0.60%
0.39%
0.14%
0.10%
0.06%
0.05%
0.05%
0.00%
100.00%
3
Overview & Trends in the Global
Sukuk Market
•
Breakdown of Total Global Sukuk Issuance by Issuer Status
Sovereign, Quasi Sovereign & Corporate Issues (All currencies) by Volume (Period 1st Jan 2001 – 31st Dec 2010)
International Sukuk
Sovereign
14,554
(31%)
QuasiSovereign
3,000
(6%)
Domestic Sukuk
Corporate
30,311
(63%)
Sovereign
52,645
(35%)
Corporate
93,841
(63%)
QuasiSovereign
3,291
(2%)
4
Overview & Trends in the Global
Sukuk Market
•
Structural Breakdown of Total Global Sukuk Issuance by Volume
Sovereign, Quasi Sovereign & Corporate Issue (All currencies), Period 1st Jan 2001 – 31st Dec 2010
International Sukuk
Sukuk Al
Salam 1,958
(4%)
Sukuk Al
Musharaka
9,286
(19%)
Sukuk Al
Wakala
2,125
(4%)
Hybrid Sukuk
(Ijarah,
Musharaka,
Murabaha)
750
(2%)
Sukuk Al
Murabaha,
911
(2%)
Sukuk Al
Mudharaba,
4,725
(10%)
Domestic Sukuk
Hybrid Sukuk
(Istisna',
Ijarah)
487
(1%)
Sukuk Al
Ijara, 21,434
(45%)
Islamic
Exchangeable
Bond
6,190
(13%)
Hybrid Sukuk Hybrid Sukuk
(Ijarah,
(Istisna',
Musharka,
Mudharaba)
Sukuk Bai'
Murabaha)
136 (0%)
Bithaman Ajil Sukuk Bai' Inah 1,399
1,215 (1%)
(BBA)
(1%)
10,993 (8%)
Sukuk Al Wakala
371 (0%)
Sukuk Al Salam
1,291
(1%)
Sukuk Al
Musharaka
39,318
(26%)
Hybrid Sukuk Hybrid Sukuk
(Istisna', (Mudarabah,
Murabaha) 40 Murabaha)
(0%)
164
Investment / Al0%
Istithmar Sukuk
, 8,814
Islamic
(6%)
Exchangeable
Bond
408 (0%)
Sukuk Al Ijarah
34,073
(23%)
Sukuk Al
Murabaha
44,628 (30%)
Sukuk Al Istisna'
3,469
(2%)
Sukuk Al
Mudharaba
3,458
(2%)
5
Overview & Trends in the Global
Sukuk Market
• Structure Developments
International Corporate Sukuk Issues
 2001 – 2005
 Ijarah (Dominant structure)
 2005 – Q2 2008
 Musharaka, Mudaraba, Exchangeable, Convertible
 Q2 2008 – Dec 2010
 Ijarah, Murabaha and Wakala
6
Overview & Trends in the Global
Sukuk Market
• Structure Developments – Lessons from Corporate Issuance
Sukuk Defaults and Restructuring





Investment Dar (Kuwait)
East Cameron (US)
Golden Belt (Saudi Arabia)
Tabreed (UAE) $463 Million
IIG (Kuwait)
7
Overview & Trends in the Global
Sukuk Market
• Structure Developments – Lessons from Corporate Issuance
Asset Based vs Asset Backed
 Are Sukuk holders investment pari pasu with other secured or unsecured
creditors?
 Do Sukuk holders have title transfer?
 In case of Real Estate, is property freehold?
8
Overview & Trends in the Global
Sukuk Market
• Sukuk Trends – Impact Due To Downturn
International Sukuk Issuance
 2007 - $ 13.8 billion
 2008 - $ 2.15 billion
 2009 - $ 7.5 billion
 2010 - $ 5.35 billion
9
Overview & Trends in the Global
Sukuk Market
• Sukuk Trends – Shari’ah Impact
Example GCC
 Gulf Holding Company Sukuk, $190 million (Musharaka Structure)
 Adjustment due to AAOIFI Shari’ah Ruling
- Purchase undertaking does not specify purchase price and linking
of redemption and periodic profit payments to the projects
profitability
- Use of Standby Letter of Credit as a ‘Security Package’
10
Overview & Trends in the Global
Sukuk Market
• Sukuk Trends – Shari’ah Innovation
Example Malaysia
 Cagamas Sukuk al-Amanah Li al-Istithmar
 Fixed Profit rate of 3.48% p.a.
 Three year tenor
 Shariah Innovation
- Use of market bid mechanism at redemption of the Sukuk
11
Overview & Trends in the Global
Sukuk Market
• Developments in Sukuk Market
 Call back of a portion of Sukuk
 Dubai Islamic Bank $200million - Cash tender offer @ 88% of face value
 Sukuk Issuance based on Reverse Enquiry
 Monetary Authority of Singapore
 Domestic Retail Sukuk Issuance
 Indonesia
 Islamic Government Investment Securities Issuances
 State Bank of Pakistan
 Investment Sukuk Issuance
 Islamic Development Bank
 Fixed Rate of Profit Issuances
 Bahrain, Indonesia and IFC Sukuk
12
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