Sukuk industry set for 'unprecedented growth'

Dubai, June 7, 2012

The global sukuk industry is witnessing unprecedented growth, complemented and triggered by diversification, an expert said.

“Large pools of Muslim wealth and abundant liquidity have ensured that demand for sukuk still exceeds supply,” said Adnan Halawi, leader of the fixed income team at business and financial intelligence company Zawya, at the 6th London Sukuk Summit held in London on June 6 and 7.

In his presentation entitled ‘Sukuk Market: Growth and Diversification’, Halawi discussed key growth factors leading to a current outstanding sukuk market of $214 billion despite the obstacles hindering growth.

Halawi also provided insights into the recent developments that have shaped the industry, one of which is the rise of diversification as a trend and a need in the Islamic bond market. Other findings include geographical expansion, a wider choice of currencies, stock exchange listings, regulatory support measures, structural innovation, and increased cross-border issuance.

“Islamic finance’s safe-haven, asset-backed nature has led to more and more investors, globally, opting for sukuk to diversify portfolios and meet financing and refinancing requirements,” he said.

Halawi cited data to show that the Middle East and North Africa region witnessed a retreat in conventional issuance in favor of sukuk, a trend that is expected to persist should North African states start selling sukuk. – TradeArabia News Service

Tags: Gulf | sukuk | Zawya | London sukuk summit |