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8/10/2019 IIFM Sukuk Report (3rd Edition) a Comprehensive Study of the Global Sukuk Market
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From the light of the Holy Quran
Allah Almighty Said:
We ask not of you a provision: We provide for you.
And the good end is for righteousness (Surat Ta-Ha, (20) 132)
:
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I
Central Bank of Bahrain
Labuan Financial Services Authority, Malaysia
Islamic Development Bank, KSA
Central Bank of Sudan
Bank of Indonesia
Autoriti Monetari Brunei Darussalam
State Bank of Pakistan
Dubai International Financial CentreCrdit Agricole Corporate & Investment Bank
Al Salam Bank, Bahrain
Kuwait Finance House, Kuwait
National Bank of Kuwait, Bahrain
Al Baraka Banking Group, Bahrain
Khaleeji Commercial Bank, Bahrain
Bank Islam Malaysia Berhad, Malaysia
Kuwait Finance House, Bahrain
Standard Chartered Saadiq, UAE
Abu Dhabi Islamic Bank, UAE
Jordan Islamic Bank, Jordan
Ahli United Bank, Bahrain
ABC Islamic Bank, Bahrain
Global Banking Corporation, Bahrain
Al Hilal Bank, UAE
Mashreq Al-Islami, UAE
Ithmaar Bank, Bahrain
Bahrain Islamic Bank
Gulf International Bank, Bahrain
The National Commercial Bank, KSA
IIFM is the International Islamic Financial Services Industrys standard setting organization focused on the Islamic
Capital & Money Market (ICMM) segment of the industry. Its primary focus lies in the standardization of Islamic
financial products, documentation and related processes at the global level. Moreover, IIFM also contribute in
the development of ICMM by organizing specialized Seminars, Workshops & Consultative meetings as well as
research on Sukukissuances around the globe.
IIFM was founded with the collective efforts of the Central Bank of Bahrain, Islamic Development Bank, Autoriti
Monetari (i.e. Monetary Authority) Brunei Darussalam, Bank Indonesia, Central Bank of Sudan and the Bank
Negara Malaysia (delegated to Labuan Financial Services Authority) as a neutral and non-profit organization.
Besides the founding members, IIFM is supported by other jurisdictional members such as State Bank of
Pakistan, Dubai International Financial Centre as well as a number of regional and international financial
institutions and other market participants.
About IIFM
Bank Muscat SAOG, Oman
HSBC, UAE
Bank Kerjasama Rakyat Malaysia
Malaysian Rating Corporation Berhad, Malaysia
Emirates Securities & Commodities Authority, UAE
Ernst & Young, Bahrain
DDCAP Limited, UK
United Gulf Bank, BahrainFirst Habib Modaraba, Pakistan
Clifford Chance LLP, UAE
Allen & Overy LLP, UAE
Zaid Ibrahim & Company, Malaysia
The Islamic Bank of Asia Limited, Singapore
The Royal Bank of Scotland, UK
Istanbul Stock Exchange, Turkey
Seera Investment Bank, Bahrain
Bank Al Jazeera, KSA
Boubyan Bank, Kuwait
Bank of London and the Middle East
Kuveyt Trk Participation Bank Inc.
RAM Rating Services Berhad
Iraqi Islamic Bank
Islamic International Arab Bank plc
Bank Islam Brunei, Darussalam
IIFM MEMBERS
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IIFM has prepared this publication for general information purposes only and this does not
constitute an invitation or solicitation to purchase, subscribe for or sell any Sukukor to engage in,
lead into, conclude or refrain from engaging in any transaction.
IIFM or the author/s accept no liability whatsoever for any direct, indirect, consequential, or other
damages and loss arising from any use of this publication.
The information contained herein has been obtained from sources considered to be reliable. IIFM
or the author/s makes no guarantee, representation or warranty as to its accuracy or completeness.
DISCLAIMER
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Research & Review Team
Mr. Ijlal Ahmed Alvi
Chief Executive Officer
Dr. Ahmed Rufai
Head of Shariah Department
Mr. Ismail Dadabhoy
IIFM Advisor
Mr. Usman Mohammad Naseer
Business Development Officer
Database Maintenance
Mr. Babar Naseer
Mr. Tareq Fouad
Design & Printing
Mr. Sayyed Zarrar
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The growth of the Islamic financial market worldwide has been very impressive and remarkable.
The innovations have changed the dynamics of the industry especially, in the area of Sukukwhich
is a means of raising government finance through sovereign issues, and also a way for companies
to obtain funding through offering corporate Sukuk.
This third edition of the IIFM Sukuk research report aims to shade light on the growth and
development of international and domestic Sukukissuances in recent years and to highlight as
well on the different Sukukstructures used in various jurisdictions active in issuing Sukuk.
This research report highlighted and analyzed some selected case studies from the international
Sukukmarkets based on widely used structures for the purpose of achieving a deeper understanding
of the mechanism of these unique and most popular and commonly used financial instruments in
the Islamic Capital and Money Market.
The report presents invaluable information on the benefits of Sukukfor all the stake holders in the
industry.
Abstract
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On the very outset of this research report, IIFM would like to take this opportunity to express its
deep sense of gratitude and thanks to individuals and institutions for their cordial support to
complete this research report.
The report would not have been seen light without the support of such individuals, the industry
institutions and the stakeholders in general.
Our sincere gratitude and highly thankful goes also to all institutions and stakeholders who provide
us with invaluable information that helped us to complete this task through various stages.
We take this opportunity to express our profound gratitude and deep regards to the Central Bank
of Bahrain (CBB) for its constant and continued support. We would also like to acknowledge and
highly thank IIFM Board of Directors and Members for their unreserved support for IIFM in its
general endeavors.
IIFM is very much thankful to Mr. Ismail Dadabhoy for his review and voluble contribution to this
report. We are also thankful to Ms. Shazia Farooq for her time and effort in jointly preparing the
case studies of this research report.
Lastly, IIFM is also thankful to Ministry of Finance Indonesia, Clifford Chance, Linklaters, HSBC
Bank, Al Hilal Bank, Noor Islamic Bank & FWU Group for providing case studies & articles on specific
Sukukstructures institutions contribution.
Acknowledgements
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From IIFM Chairman & Executive Director - Banking Supervision Central Bank of Bahrain (CBB)
In the Name of Allah, the Most Gracious, the Most Merciful
All the praises and thanks be to Allah Almighty. May peace and blessings of Allah Almighty be upon His
Messenger Prophet Muhammad (S.A.W.) his family and all his companions.
The continuing evolution of the SukukMarket is critical to the sustainability of the future growth of Islamic
finance. Reliable research which provides data in respect of Sukukissuance is a key factor in understanding
the way in which the market is developing, and this in turn can be used to inform decisions as to when
to issue a Sukuk; the anticipated terms of the issuance; and to facilitate the monitoring of any secondary
market.
In 2010, the International Islamic Financial Market (IIFM) successfully published the first edition of a Sukuk
Research Report, followed by the second edition in 2011. The two reports provided a comprehensive
analysis of the market at the respective times. It has been encouraging to note the level of praise and
admiration both reports received from existing and potential market participants.
The latest Research Report builds upon the previous success, and it goes a long way to strengthen
and deepen the understanding of global Sukukstructures and issuance. The Report provides a reliable
database, with accompanying professional analysis, and this can be used as a benchmark by regions
which have a high concentration of the worlds Sukukissuance.
This research report aims to provide information for industry decision makers in their assessments of
trends in the issuance of Sukukglobally. The report also amply illustrates the importance of this field of
transactions to all stakeholders, and clearly demonstrates the way in which Sukukissuance and utilisation
has evolved.
I believe that the IIFM research team can be confident that there will be many grateful readers who will
gain a broader perspective of the Sukukstructure and how stakeholders can optimize the benefits of the
Sukukmarket as a result of their efforts.
Mr. Khalid Hamad
April 2013
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Foreword
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From The Chief Executive Officer, International Islamic Financial Market (IIFM)
In the Name of Allah, the Most Gracious, the Most Merciful
All the praises and thanks be to Allah Almighty, the Lord of all that exists. And may peace and blessings of Allah Almighty be
upon His Messenger Prophet Muhammad, his family and all his companions.
There is no doubt that Sukukplay an essential role in the development of Islamic Capital and Money Market and alsoplay an important role in contributing to the economic growth and prosperity of Islamic countries. IIFM efforts in this
respect as reflect in its 1stand 2ndEditions of the SukukReports are evident. The two reports were very well received
by the practitioners. Considering the value addition provided by IIFM in terms of Sukukissuance database and issues
covered in the reports.
I have a great satisfaction in introducing this third edition of the IIFM SukukReport to the stake holders in the industry
in particular, governments, Islamic financial institutions and corporates. This report provides valuable information
obtained through data analysis, regarding the Sukukissuances for the years January 2001 January 2013.
This report will pay particular attention on the prospects and overview trends of the global SukukMarket and it will
highlight on major issuances around the globe.
This report is an excellent example of cooperative endeavor among a number of institutions and individuals from
different jurisdictions. They have put in their efforts and contributed to the successful completion of this report. I will like
to acknowledge their contribution individually but the constraint of space restricts me from that. The motivation and
commonality among the stakeholders of the research objective despite their belonging to divergent jurisdictions helped
IIFM to complete this important task without obstructions. The varied information of the collaborating institutions which
have been brought into this report, the issuance specific data and the profound analysis make the report immensely
useful and valuable.
I am very much thankful to Securities Commission Malaysia, Bank Indonesia, Ministry of Finance Indonesia, State Bank
of Pakistan and Central Bank of Sudan for their continued support and enriching t he IIFM database with valuable Sukuk
data information and verification.
I must place on record my profound gratitude to the Central Bank of Bahrain (CBB), IIFM board of directors and Members
for their continued support. I must also wholeheartedly thank the IIFM research team who through their hard work,
devotion and sincerity has completed this challenging task of Sukukreport successfully. It is my hope that the reader
will find this report useful and of value.
Mr. Ijlal Ahmed Alvi
April 2013
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CONTENTS
CONTENT PAGE
Disclaimer ii
Research Team iii
Abstract iv
Acknowledgments v
Foreword (from the IIFM Chairman & CEO) vi
Contents viii
List of Tables ix
List of Charts ix
INTRODUCTION 1
CHAPTER ONE : SUKUK AL- ISTITHMAR(INVESTMENT SUKUK): 3 MEANING AND TYPES1 Introduction 3
2 SukukAl-Istithmar 3 2.1 Definition 3
2.2 Types of SukukAl-Istithmar 4
2.3 Characteristics of SukukAl-Istithmar 7
3 Fundamental differences between SukukAl-Istithmar and Bonds 7
4 Conclusion 7
CHAPTER TWO : OVERVIEW OF THE GLOBAL SUKUKMARKET 9
2.1 Resurgence of SukukMarket 9
2.2 Global SukukIssuances 9
2.3 Distribution of Global SukukIssuance by Issuer Status 14
2.4 International SukukMarket 192.5 Domestic SukukMarkets 22
2.6 Structural Break-up of Global SukukMarket 24
2.7 Short Term SukukMarket 29
CHAPTER THREE : CASE STUDIES OF SELECTED INTERNATIONAL SUKUKISSUES 30
3.1 Abu Dhabi Islamic Bank (ADIB) Shirkat-Ul-MilkBased Sukuk 2011 30
3.2 Khazanah Nasional Wakalah Based Sukuk2011 34
3.3 Majid Al Futtaim (MAF) Wakalah Based Sukuk2012 38
3.4 Saudi Electricity Company (SEC)Al IjarahBased Sukuk2012 43
3.5 Projek Lebuhraya Usahasama Berhad (Plus Berhad)Musharakah Based Sukuk2012 46
CHAPTER FOUR : CASE STUDIES & ARTICLES ON SPECIFIC SUKUKSTRUCTURES 49INSTITUTIONS CONTRIBUTION
4.1 Government of Indonesia SukukIssuances (SukukNegara) 49
4.2 Republic of Turkey 56
4.3 Abu Dhabi Islamic Bank PJSC Mudaraba-Based Tier 1 Capital Sukuk2012 59
4.4 Article on SukukHeading Forward 63
4.5 Article on SukukSecondary market overview (Q4 2012 Q1 2013) 66
4.6 FWU Group SukukCASE STUDY 66
CONCLUSION 68GLOSSARY 71
REFERENCES 73
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LIST OF TABLES
TABLE PAGE
Table 1: Selected Hall Mark GlobalSukukIssues & Trends -2011- Jan 2013 - 11
Year wise latest first USD 700 Millions or greater (International & Domestic)
Table 2: Selected the Non-Local Currency hallmark global Sukukissuances 13
during last 2 years
Table 3: landmark Fixed Profit RateSukukIssuances during Jan 2011 Jan 2013 period 14
Table 4: Global SukukIssuances by Issuer Status 2001- Jan 2013 15
Table 5: Global Sovereign SukukIssues -Selected Value Leaders 2011-2013 - 15
(International & Domestic)
Table 6: Global Corporate SukukIssues -Selected Value Leaders 2011-2013 - 16
(International & Domestic)
Table 7: Global Quasi-Sovereign SukukIssues -Selected Value Leaders 2011-2012 - 18(International & Domestic)
Table 8: Regional Break-Up of the Total International SukukIssuance 2001-Jan 2013 20
Table 9: International SukukIssues -Selected Value Leaders in USD 2011- Jan 2013 - 21
(Corporate, Sovereign & Quasi-Sovereign)
Table 10: Regional break-up of the Total Domestic SukukIssuance 2001-Jan 2013 22
Table 11: Domestic SukukIssues -Selected Value Leaders in Local Currency 2011- 2013 - 23
(Corporate, Sovereign & Quasi-Sovereign)
Table 12: Cross Border International SukukMaturing 2013 26
Table 13: Cross Border International SukukMaturing 2014 26
Table 14: Domestic SukukMaturing 2013 27
Table 15: Domestic SukukMaturing 2014 28
Table 16: Total Global Short-Term SukukIssuance All Currencies 29
LIST OF CHARTS/FIGURES
CHART PAGE
Chart 1: Total Global SukukIssuance (All Currencies) 10
Chart 2: Total Global SukukIssuance (All Currencies) Breakdown by Issuer Status 18
Chart 3: Total Global SukukIssuance by Value (All currencies) Structural Breakdown 25
Chart4: Total Global SukukIssuance by currency Breakdown 2001- Jan 2013 25
Chart 5: Total Global SukukIssuance by Regional Breakdown 2001- Jan 2013 26
Chart 6: Total Global Short-Term SukukIssuance by Currency 29
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The International Islamic Financial Market (IIFM) over the past years has been in the forefront of global initiativesand efforts to help in establishing a sustainable, viable and feasible global Islamic Capital and Money Market
industry through its comprehensive documentation and product standardization initiatives that cater not onlyIslamic Financial Industry but also to ensure that the Islamic Capital and Money Market products and servicesremain attractive to all investors, creditors and Sukukissuers across the Globe.
In an attempt to further strengthen efficiency, awareness and enhance competitiveness of the Islamic Capital andMoney Market industry, in 2010 IIFM has published its first Sukukresearch report (IIFM SukukReport 1stEdition) aspart of its efforts to help the industry move forward in a comprehensive manner.
In 2011 the 2ndedition of IIFM Sukukresearch report (IIFM SukukReport 2ndEdition) was published in order to meetthe growing and increasing needs of those interested in the SukukMarket by providing them useful informationon the latest developments of Sukukmarket.
The two reports covered a number of important issues related to Sukukissuances across the globe over the periodof 2001 to 2010.
With the continued rise in global SukukIssuances whether its domestic or international, sovereign or corporate,it has become very much necessary and essential to shed more light on the evolution of this important financialsector in the Islamic finance industry.
This third edition of Sukuk report as the previous reports provides information and relevant details of Sukukissuances during the period of 2011 -2012 The main objective here is to highlight the development of the Sukukmarket during this period, in particular, in the GCC countries, Asia represented by Malaysia, Indonesia and othercountries such as Turkey, Pakistan etc., by analysing the transition and practices that have taken place. In doingso, some of the relevant issues related directly to Sukukissuances globally during this period of time is discussedand analyzed.
As far as the International Sukuk secondary market is concern, there has been some improvement given therecord issuances during last two years, however, the data is not yet available to IIFM in order to assess the level ofsecondary market Sukuktrading hence, our intention is to continue work on Sukuksecondary market and publishthe report at a later date.
Research methodology
Both quantitative and qualitative methods have been used in writing this report.
A quantitative method mainly involves data collection on various Sukukissuances from January 2011 to January
2013 and also further data verification for 2001 to 2010 period. The main focus in this method is to collate datafrom writing materials relating to the topic of the research. This includes prospectuses, publications, articles,magazines, online research, and information service providers. Data collected was then filtered with respect todifferent criteria such as chronology, geographic distribution, issuer status, country of origin, etc and depicted inthe form of tables and/or charts for better understanding. Moreover, certain IIFM Member jurisdictions as well asinstitutions have also assisted IIFM in data verification.
However, in a qualitative method the main focus is to collect and analyze materials or data in respect to Sukukissuance acceptability. This includes the types of structures used, legal, innovation and Shariahissues.
This research report is organized into four standalone chapters which are organized as follows:
Introduction
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Chapter One explains the meaning, concept and types of SukukAl-Istithmar(An Arabic term ofinvestment Sukuk) and common mistakes in this regard.
Chapter Two discusses overview of the Sukukissuances over the period of January 2011 to January2013.
Chapter Three comprises of selected Sukukcase studies of international & domestic Sukukissuancesprepared by IIFM.
Chapter Four consists of case studies & articles on specific Sukukstructures, written and prepared bymembers & other institutions.
Among the the objective of this research report is to help the stake holders in the industry in particular,governments, Islamic financial institutions and corporate, evaluate and asses their decisions on Sukukissuanceas well as in their decision making and policy formulation. Also to orient those interested in the SukukMarket tothe nature of Sukukfield and how it can be useful for those who need to gain some basic as well as more in-depthknowledge and background on the level of research in this field. In order to maximize the benefit of the report,some case studies and articles on specific Sukukstructures and issues have been included.
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3
SUKUK AL- ISTITHMAR(AN ARABIC TERM OF INVESTMENT SUKUK)
MEANING AND TYPES
By: Ahmed Rufai - IIFM
Abstract
Every so often question is raised on whether there is any difference between Sukuk Al-Istithmarand SukukAl-Mudarabahor SukukAl-Wakalah biAl-Istithmaror SukukAl-Salametc. Some suggested in their writings on Sukukthat SukukAl-istithmarshould be distinguished from Sukukal- Mudarabahand Sukukal-Wakalah bi Al-Istithmarwithout realizing that all these contracts in this context are in general termed or called Sukuk Al-Istithmar.Therefore, the objective of this chapter is to explain the meaning and types of Sukuk Al-Istithmar based on theAAIOFIShari ahStandard, without going into details of itsShari ah provisions and practical applications.
1. IntroductionSukukin general reflect participation in the underlying asset so that what is traded is not a merely debt as eachcertificate must represent an undivided interest in the asset. This is because in the light of the prohibition of Riba(i.e. interest) under theShari ahtrading in pure debt instrument is forbidden. Therefore, Sukukare structured toachieve a desired economic objective in a manner conform to the principle and sprit ofShari ah.
Investment in tangible assets, used for productive purposes and reaping the rewards arising from those assets isthe core principle of Islamic finance and it is this principle on which Sukuksecuritization structures are founded.
Moreover, for a Sukukstructure to comply withShari ahprinciples the underlying asset must also comply withtheShari ahprinciples as well. In other words the underlying asset must be lawful from theShari ahperspective.
As mentioned in the abstract that the primary purpose of this chapter is to give general information on SukukAl-Istithmarwithout digging deep into its Sahriah provisions and practical applications but to know that theseSukukmust be structured on the basis of the known Islamic investment transaction contracts such as Mudarabah,or Wakalahor Ijarahor Salametc. all of which are called/termed/categorized as Sukuk Al-Istithmaraccording toAAIOFI ShariahStandard.
2. SukukAl- Istithmar
2.1 Definition
The early Muslims have used the wordAssakk,
which means certificate or order of payment. Andthe plural of this Arabic term is Sukuk1 .
They used Sukukin those early days as a form of papers representing financial obligations originating from tradeor any other commercial activities. However, in the modern day Islamic financial system, Sukukare known asinstruments of the Islamic capital Market and it is one of the best financial instruments and mechanisms that arecommensurate with the needs of issuers/originators and investors.
Chapter One
1. Sheikh Ahmad Al- Fayyumi Al- Muqri, Al-Misabah Al-Munir, Kitab Al-Saad, Al-Saad ma a Al-Kaf.
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4
Sukuk Al-Istithmaris defined as follows:
Investment Sukukare certificates of equal value representing undivided shares in ownership of tangible
assets, usufructs and services or (in the ownership of) the assets of particular projects or special investment
activity2.
The concept of Sukuk Al-Istithmar can be extracted from this definition as certificates of equal value issuedand sold to investors who, by virtue thereof, have proportional claims over the financial rights underlying thesecertificates as well as proportionately liable for obligations arising from these certificates i.e. benefits and risks.
2.2 Types of Sukuk Al- Istithmar
There are many types of Sukuk Al-Istithmar which can be issued in many forms and structured from any of theknown Islamic investment transaction contracts such as Wakalah contract or Mudarabah contract or Salamcontract or Ijarahcontracts etc. in other words SukukAl-Istithmar must be issued in accordance with one of theseknown contracts. The most important of such contracts in this regard as set out in the AAIOFI Shari ahStandard
are the following3:
2.2.1 SukukMilkiyyah Al-Maujudaat Al-Muajjarah (i.e. Certificates of ownershipin leased assets)
These are certificates that represent equal value and are issued by the owner of leased asset or a tangible assetto be leased by promise, or by his financial agent with the aim of selling asset and recovering its value fromsubscription. Thus, the holders of the certificates become owners of the assets.
In this transaction the Issuer is the seller of a leased asset or a tangible asset to be leased on promise, thesubscribers are the buyers of the asset, mobilized funds are the purchase price of the asset. The certificate holderswill become the owners of the assets jointly sharing the profits and losses on the basis of the partnership that existbetween them.
2.2.2 SukukMilkiyyah Al- Mana fi a(i.e. Certificates of ownership of usufructs)
These Sukukhave different types as explained bellow:
(a) SukukMilkiyyah Al- Mana fi a Al- a ayaan Al-maujudah(i.e. Certificates of ownership of
usufructs of existing assets
These are Certificates of equal value that are issued either by the owner of an existing asset or a financialintermediary acting on the owners behalf, with the purpose of leasing or subleasing this asset and receiving therental from the revenue of subscription. Thus, the holders of the certificates become owners of the usufruct of theasset.
In this transaction the Issuer is the seller of usufruct of an existing asset, the subscribers are the buyers of theusufructs and the mobilized funds are the purchase price of the usufructs. Thus, the certificate holders becomejointly the owners of the usufructs sharing its benefits and risks.
(b) Sukuk Milkiyyah Al- Mana fi a Al- a ayaan Al-mausufah fi Al- dhimmah(i.e. Certificates of
ownership of usufructs of described future assets)
These are certificates of equal value issued for the aim of leasing out tangible assets that the lessor is liable toprovide in the future whereby the rental is recovered from the subscription revenue. Thus, the holders of thecertificates become owners of the usufruct of these future assets.
2. Accounting and auditing organization for Islamic Financial Institutions (AAIOFI) ShariahStandards, 2010, item 2
Shariah Standard no. 17. PP. 307 309.
3. Ibid. (See the AAIOFI ShariaStandard no. 17 for more details on these Sukuk).
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In this transaction whereby the ownership of described usufructs to be made available in the future the Issuer is theseller of such usufruct, the subscribers are the buyers of the usufructs and the mobilized funds from subscriptionare the purchase price of the usufructs. Thus, the certificate holders become jointly the owners of the usufructssharing its benefits and risks.
(c) Sukuk Milkiyyah Al-Khadamaat min taraf mu ayyan(i.e. Certificates of ownership of services of a specified
party)
These are certificates of equal value issued for the aim of providing services through a specified provider (such aseducational benefits in a nominated university) and obtaining the value in the form of subscription income. Thus,the certificates holders become owners of the services.
(d) Sukuk Milkiyyah Al-Khadamaat min taraf mausufun fi Al- dhimmah (i.e. Certificates of ownership of
described future services)
These are certificates of equal value issued for the purpose of providing future services through described provider(such as educational benefits/ programs of determined specifications without mentioning the educationalinstitution) and obtaining the fee in the form of subscription income. Thus, the holders of the certificates becomeowners of the services.
In these transactions (c & d) the issuer is the seller of services, the subscribers are the buyers of the services and themobilized funds are the purchase price of the services.
The certificate holders are entitled to sell all types of usufructs of (b, c & d) in addition to the funds of reselling suchusufructs
4.
2.2.3 Sukuk Al- Istisna a
These are certificates that represent equal value issued with the aim of mobilizing required funds to be used forthe production of certain goods which to be owned by the certificate holders when its produced on Istisna abasis.
In this transaction the issuer of these certificates is the manufacturer (Seller), the subscribers are the buyers of the
goods to be produced and the mobilized funds are the cost of the goods. The certificate holders are entitled to thegoods or the selling price of the manufactured goods on the basis of a parallel Istisna aif any.
2.2.4 Sukuk Al- Murabahah
These are certificates that represent equal value issued for the purpose of financing the purchase of Murabahahcommodity and therefore, the certificate holders become the owners of the purchased commodity.
In this transaction, the issuer of these certificates is the seller of the Murabahahcommodity, the subscribers are thebuyers of that commodity and mobilized funds are the purchasing cost of the commodity. The certificate holdersown the Murabahahcommodity and are entitled to its sale price.
2.2.5 Sukuk Al- Musaqaah(i.e. Irrigation certificates)5
These are certificates that represent equal value issued on the basis of an irrigation contract for the purpose ofusing the mobilized funds for irrigating trees that produce fruits as well as meeting other expenses relating tothe maintenance of the trees and therefore, the certificate holders become entitled to a share in the crop as peragreement.
In this transaction, the issuer of these certificates is the owner of the garden/ land that consist of trees, the
5
4. Accounting and auditing organization for Islamic Financial Institutions (AAIOFI) ShariahStandards, 2010, item 5/1/5/2
ShariahStandard no. 17. P. 311.
5. This is a type of contract in which the owner of agricultural land shares its produce with another person in return for his
services in irrigating the garden.
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subscribers are those who assume the obligation of irrigation process on the basis of Al-Musaqah contract andthe mobilized funds stand as the maintaining cost of the garden/ trees. The certificate Holders are entitled to ashare in the produce of the trees as per the agreement.
2.2.6SukukAl- Musharakah (i.e. participation certificates)
These are certificates that represent equal value issued with the aim of using the mobilized funds for establishinga new project or developing an existing one or financing a business activity on the basis of any of partnership
contracts. Thus, the certificate holders become the owners of the project or the assets of the activity as per theirrespective shares.
SukukAl-Musharakahhowever, may be managed on the basis ofAl-Shirkahi.e. participation orAl- MudarabahortroughAl-Wakalahbil Istithmari.e. investment agency as explained below:
2.2.6.1 SukukAl- Sharikah (i.e. Participation certificates)
These are certificates representing projects or activities that are managed on the basis of Musharakah contract byappointing either one of the parties or any other party to manage the operation.In this transaction, the issuer is the inviter to a partnership with him in a specific project or determined activity,
the subscribers are the partners in the Musharakah contract and mobilized funds are the share contribution of thesubscribers in the Musharakah capital. Thus, the certificate holders own the assets of partnership including profitsand losses and they are entitled to share of profit, if any.
2.2.6.2 Sukuk Al- Mudarabah6
These are certificates that represent projects or activities that are managed on the basis of Mudarabahcontract byappointing Mudaribwho could be one of the partners or any other person for the management of the operation.
In this transaction, the issuer of these certificates is the Mudarib, the subscribers are the capital owners andmobilized funds are the Mudarabahcapital. Thus, the certificate holders own the assets of Mudarabahand sharethe profit as per the agreement. They also being the capital providers, bear the losses, if any.
2.2.6.3Sukuk Al Wakalah bil Istithmar(i.e. Certificates of investment agency)
These are certificates that represent projects or activities that are managed on the basis of investment agency byappointing an agent to manage the operation on behalf of the certificate holders.
In this transaction, the issuer of these certificates is the investment agent, the subscribers are the principals andthe mobilized funds are the entrusted capital of the investment. Thus, the certificate holders own the assetsrepresented by the certificates with its benefits and risks, and also they are entitled to the profits if any.
2.2.7 Sukuk Al- Muzaraah (i.e. sharecropping certificates)7
These are certificates of equal value issued for the objective of using the mobilized funds in financing a project onthe basis of a Muzaraah contract. Thus, the certificate holders become entitled to a share in the crop as per theterms of the agreement.
In this transaction the issuer of these certificates is the owner of the land, the subscribers are the cultivators whoinvest on the basis of Muzaraah contract and the mobilized funds are the cultivation cost. Thus, the certificateholders are entitled to a share of the produce of the land as per the agreement.
6
6. Al- Mudarabah orAl-Qiradh: Is a contract between a Rabbul Mal(capital provider) and (an entrepreneur) under
which the Rabbul Malprovides capital to be managed by the Mudariband any profit generated from the capital is shared
between the two parties (Rabbul maland Mudarib} according to mutually agreed profit sharing ratio whilst financial losses
are borne by the Rabbul Malprovided that such losses are not due to the Mudaribsmisconduct, negligence or breach of
specified terms of the contract.
7. This is a type of contract in which one person works on the land of another person in return for a share in the produce of the land.
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2.2.8 Sukuk Al - Salam8
These are certificates of equal value issued for the aim of mobilizing Salamcapital so that the goods to be deliveredon the basis of Salamcontract are owned by the certificate holders.
In this transaction the issuer of these certificates is the seller of the Salamgoods, the subscribers are the buyers ofthe goods and the mobilized funds are the purchase price of the commodity, which is the Salamcapital. Thus, thecertificate holders are the owners of Salamgoods and they are also entitled to the sale price of the certificate or
the sale price of the Salamgoods sold through a parallel Salam, if any.
2.3 Characteristics of SukukAl- Istithmar9
Sukuk Al-Istithmaris characterized with many features that distinguish them from the non Shari ahcomplaintbonds. These features include:
(a) SukukAl-Istithmar are certificates of equal value issued in the name of investor therefore, a legitimate claimof its owner/investor over the financial rights and obligations represented by the certificate can be established.
(b)It represents a common share in the ownership of the tangible assets earmarked for investment, usufructs,services etc. and hence, it does not represent debt as in the case of non Shari ahcompliant bonds.
(c)It is issued on the basis of known and acceptable Shari ahinvestment contracts and in accordance with Shari ahprinciples which governing its issuance as well as its trading.
(d) Investors in SukukAl-Istithmarshare the profit according to the agreement set forth in the prospectus andalso bear the losses if any, based on the percentage/proportion owned by each investor.
3. Fundamental differences betweenSukuk Al- Istithmar and Bonds
Bond is defined as:
A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows
the funds for a defined period of time at a fixed interest rate10
.
Based on this definition of the bonds, we can see that the fundamental differences between Bonds and SukukAl-Istithmaris in the fact that SukukAl-Istithmar are not fixed income securities, because they do not representdebts between the issuer and the investors. Rather, the investors share Sukukreturns and proceeds according topercentages stated in the prospectus, and bear losses in proportion to the number of the Sukukcertificates heldby them.
AAIOFI Shari ahStandard clearly stated that these SukukAl-Istithmarare investment Sukukin order to distinguishthem from shares, bonds etc. which, as well as other large part of the conventional securitization market, are notconform to theShari ah principles of transaction as its income element of the cash flow is considered to be Riba(i.e. interest) hence, could not be accepted as an asset class as well as it represent debt rather than Shariahhcompliant acceptable commodity.
4. Conclusion
The of this chapter can be summarized in the following points:
4.1 There is no any objection from theShari ahto issue SukukAl-Istithmarcertificate on the basis of any knownSahari ah investment contracts, such as Wakalahor Mudarabahor Salamor Ijarahcontracts etc. and the certifi-
8. Al Salami.e. Advance purchase contract.
9. Accounting and auditing organization for Islamic Financial Institutions (AAIOFI) ShariahStandards, 2010, item 4 Shariah
Standard no. 17. PP.309-310.
10. http://www.investopia.com/terms/b/bond.asp#ixzz2LWMKa0x6.
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cates must be issued for asset that are tangible assets, usufructs and services by dividing them into equal sharesand issuing Sukukfor their value. In other words, it must be backed by aShari ahcompliant real underlying assetsthat are subject to aShari ahknown contracts and the rights and obligations of all parties in the transaction shouldbe spelled out clearly and identified in a transparent manner. Also its documentation must demonstrate that anyincome arising must derive from the underlying activities for which the funding has been used, and not simplycomprise Riba (i.e. interest) as these SukukAl-Istithmardeferred from bonds and fixed-income securities whichrepresent debts.
4.2 Under the umbrella of SukukAl istithmar there are different types of Sukukwith differentShari ahrulings andstructures. All these Sukukare called SukukAl istithmar in order to distinguish them from shares and bonds.
4.3 SukukAl-Istithmarrepresents undivided shares in the ownership of all the assets made available for invest-ment of whatever type. Therefore, the relationship between the investors and issuer is based on some kind ofpartnership in profit and loss sharing not on debt as debts owed as liability are not allowed inShari ahto securitizethem for the purpose of trading.
4.4 For the sake of information, SukukAl WakalahbiAl-Istithmar(i.e. Certificate of investment agency) is under theumbrella of SukukAl istithmar which includes as mentioned above, various Islamic contracts. Some in the Sukukindustry are not aware of this as they suggested in their writings that SukukAl-istithmarshould be distinguishedfrom SukukAl- Mudarabahand Sukukal-Wakalah biAl-Istithmar.
4.5 It is a Shari ahrequirement that SukukAl-Istithmarmust be structured and issued on the basis of any knownIslamic investment contracts, so that the transactions will be subjected to its (i.e. the investment contracts) gen-eral provisions and conditions. This is after closing subscription, receipt of the value of the certificates and puttingit to use as planned.
Below diagram illustrate the types of Sukuk Al- Istithmar where they must be structured and issued on the
basis of any of the Islamic nominated Investment contract:
8
12
Types
of
Sukuk
Al
-
Isthmar
Sukuk
Al-Ijarah
SukukAl-Murabahah
Sukuk
Al- Muzara'ah
Sukuk of ownership
of usufructs.These
Sukukhave different
types as follows:
Sukuk
Al- Issnaa
Sukuk Al-
Musaqaah
Sukuk
Al - Salam
Sukuk Al-
Musharakah maybe
managed on the
following basis
(a) Sukuk of ownership of
usufructs of exisng assets.
(b) Sukukof ownership of
usufructs of described
future assets.
( c) Sukukof ownership of
services of a specified
party.
(d) Sukukofownership of
described future
(a) SukukAl-Sharikah
(b)Sukuk Al-Mudharabah
(c ) Sukukof investment
agency (i.e.Al Wakalah
bil Isthmar)
Mixed asset
Sukukor
hybridSukuk
Combine two or
more forms of
Islamic
financingin
their structure.
The underlying
pool of assets
can comprise of
Issna,
Murabahah
receivables as
well as Ijarah
etc.
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OVERVIEW OF THE GLOBAL SUKUK MARKET
2.1 Resurgence of Sukuk Market
Islamic Capital Market continued its upward trend in recent years and is led by the key Islamic fixed profile
instrument known as Sukuk. After a relatively large dip in the Sukukissuances in mid 2008 to 2009, the year 2010
showed the glimpse of true potential of Sukuk.
The global financial crisis had a direct impact on Sukukmarket and the few holders of troubled Sukukwere facing
the default and insolvency proceedings and uncertainty on legal difficulties in restructuring Sukuk. However, once
several defaulting Sukukwere restructured and legal certainty was established the market confidence returned.
The most recent restructuring of Sukukis Dana Gas US$ 1 billion Sukukwhich is expected to be soon approved
by the creditors. The Dana Gas restructuring involve partial cash repayment and issuance of US$ 425 million
Convertible Sukuk& US$ 425 million Sukukwhich shows that legal system is present to tackle such events though
further improvement may be required to tackle certain issues specific to Islamic Finance.
Furthermore, the Islamic jurisdictions also stepped in and started bench mark Sukuk issuances both in their
Domestic Market as well as in International Market. A number of Islamic countries such as Indonesia, Turkey,
Pakistan, GCC countries and others gave priority to developing the Islamic Financial Services Industry particularly
Sukukmarket.
The year 2011 & 2012 witnessed record Sukukissuances by Sovereigns, Quasi Sovereigns & Corporates and this
was in line with IIFMs SukukReport 2nd edition indication that Sukukmarket will grow and Islamic jurisdictionswill lead the Sukukmarket recovery.
The other helpful and much needed development is use of Sukuk in project financing as well as for aircraft
financing (Emirates Airline, Malaysian Airline, Air Asia) which are of long term nature and Sukukis well suited for
these kind of financing requirement.
Finally, financial institutions are no longer the majority investors in Sukukas fund managers; Takaful operators,
high Net worth Individuals and others are now investing in Sukukwhich is one of the reason why most of the Sukuk
are issued on fixed profit rate basis.
2.2 Global SukukIssuances
As illustrated in the below chart, the share of sovereign as well as Quasi Sovereign Sukukissuances has increased
a great deal during Jan 2011 Jan 2013 period and is contributing to the further development of Sukukmarket:
Chapter Two
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Chart 1: Total Global SukukIssuance (All Currencies) - Jan 2001 Jan 2013 US$ Millions
Global Sukukmarket continued its positive upward momentum after the initial shock of the financial crisis. Sukukissuance enjoying a very successful runs that began in 2010 and recorded another pinnacle in 2012, and in doingso, it crossed the $100 Billion mark of financing arranged via Sukuk. The market achieved a very respectableissuance of US$ 137 Billion.
The Financial crisis of 2008, which pressured developed market financial institution into contracting anddeleveraging, played a big part in propelling Sukukissuance to new heights. Sukukis now establishing a firm baseas an alternative source of funding, not just for the GCC and Malaysian market but with interest gathering fromEurope, African continent and the CIS countries.
We witnessed many milestones in 2012, just to highlight a few:
a) The biggest Sukukissuance from PLUS - Malaysia
b) The biggest Saudi Sukukby the Civil Aviation Authority
c) First Intl Sukukissuance with a Saudi Sovereign Guarantee
d) Debut International Sukukby The Republic of Turkey
e) Debut Domestic Lira issuance by Republic of Turkey
f ) First Sukukissuance from a financial institution in Kazakhstan
g) First Perpetual Sukukby Abu Dhabi Islamic Bank
h) First Tier 1 Sukukby Abu Dhabi Islamic Bank
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
01,172 1,371 7,057 9,465
13,69833,837
50,041
24,26437,904
52,978
92,403
137,499
472,683
10,993
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
-Jan
uary
Total
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The following table gives a clear picture on the hallmark Global Sukukissues during 2011 Jan 2013:
Table :1- Selected Hall Mark Global SukukIssues & Trends -2011- January 2013
(US$ 700 Millions or greater)
2012
PLUS
Berhad
Twenty Three Domesc Quasi-
Sovereign Sukuk issuances of various
tenors, Al Musharaka, issuer from
Malaysia
9,728 16
2012
AbuDhabi
Islamic
Bank
Internaonal Corporate, MudarabahSukuk, Tier 1 & perpetual, issuer
1,000 Perpetual
2012
Qatar Internaonal Islamic
Bank
InternaonalCorporate Hybrid
Sukuk
700 5
2012
Qatar
Islamic
Bank
Internaonal Corporate Sukuk Al
Wakalah
750 5
2012
Celcom
Transmission
Five Domesc Corporate Sukuk
Issuances, Al Murabahah, Issuer
from Malaysia
1,442 8
2012
Tanjung
Bin
Power
9 Nine Domesc Corporate Sukuk
Issuances of various tenors, Al
Ijarah, issuer from Malaysia
1,101 12
2012
Emirates
Islamic
Bank
Two Internaonal Corporate Sukuk
issuances, Al Musharaka, issuer from
Dubai
1,000 6
2012
Johor
Corporaon
Three Domesc Corporate Sukuk
issuances, Al Wakalah, issuer from
Malaysia
941 7
2012
Banque
Saudi
Fransi
Internaonal Corporate Sukuk, Al
Wakalah, Tier 2, issuer from KSA
750 5
Issue
Year
Issuer
Highlight
Amount inMillions USD or
USD Equivalent
Average Tenor
(Years)
2013 Sime Darby Berhad The World biggest Palm Oil producer
and lowest ever USD profitby any
corporaonglobally, two Sukuk
tranches having 5 & 10 years tenor
(Sukuk Al Ijarah Malaysian Issuer)
800 8
2013
Governmentof
Dubai
Internaonal Sovereign Sukuk Al
Ijarah Issuer Dubai,750 10
2012
Islamic
Development
Bank
Two Internaonal Quasi-Sovereign
Sukuk Issuances, Al Wakalah and
only AAA rated Sukuk
1,300 5
2012
Khazanah
Nasional
Bhd
Four Domesc Quasi-Sovereign
Sukuk issuances of various tenors, Al
Musharakah, Issuer from Malaysia ,
1,450 15
2012
NaonalHigher Educaon
Fund Corporaon
Malaysia
Two Domesc Quasi-Sovereign
Sukuk issuances, Al Murabahah,
Government of Malaysia
1,118 10
2012
Saudi
Electricity
Company
Two Internaonal Quasi-Sovereign
Sukuk Issuances, Al Ijarah,
issuerfrom KSA
1,750 8
2012
General Authority Of Civil
Aviaon
DomescQuasi-Sovereign Sukuk, Al
Murabahah, issuer from KSA
4,000 10
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Continuous innovation together with more Debut Sukuk issuances and refinancing of maturing Sukuk is likelyto maintain the SukukVolume trajectory upwards in 2013 and beyond, as countries and corporate look to takeadvantage of extremely attractive low yields being priced by the market.
2011
Malaysian
Airline
Nine Domesc Quasi-Sovereign
Sukuk issuances of various tenors, Al
Murabahah
2,576 7
2011
Islamic
Development
Bank
1 InternaonalQuasi-Sovereign
Sukuk Al Wakalah from KSA
750 5
2011
Manjung Island Energy
Berhad
7 DomescCorporate Sukuk Al
Ijarah from Malaysia
1,242 9
2011
Saudi
Arabian
Aramco
DomescCorporate Sukuk Al
Musharakah longer tenor
1,000 14
2011
Nakheel
Group
DomescCorporate Sukuk Al Ijarah,
issuer from Dubai
1,034 5
2011
Sarawak
Energy Bhd
Four Domesc Corporate Sukuk
Issuances of various tenors,
AlMusharaka, issuer from Malaysia
990 9
2011
Central
Bank
of
Bahrain
Internaonal Sovereign Sukuk Al
Ijarah, 6.27% p.a. profitrate
750 7
2011
Government
of
Indonesia
Internaonal Sovereign Sukuk Al
Ijarah, 4% p.a. profitrate
1,000 7
2011
Government
of
Indonesia
Five Domesc Sovereign Sukuk
Issuances, Al Ijarah
2,033 10
2011
Government
of
Malaysia
Two Internaonal Sovereign Sukuk
Issuances, Al Wakalah,
2,000 8
2011
Governmentof
Malaysia
Two Domesc Sovereign Sukuk AlMurabahah,
984 9
2011 Government of Qatar DomescSovereign Sukuk Al Ijarah, 9,067 3
Source: IIFM Sukuk Issuance Database (Jan 2011 Jan 2013)
2012
Maxis
Berhad
DomescCorporate Sukuk, Al
Musharaka, issuer from Malaysia
811 10
2012
Sarawak
Energy
Bhd
Two Domesc Corporate Sukuk
issuances, Al Musharaka, issuer from
Malaysia
801 13
2012
Government
of
Malaysia
Seven Domesc Sovereign Sukukissuances of various tenors, Al
Murabahah
2,527 12
2012
Government
of
Indonesia
Internaonal Sovereign Sukuk Al
Ijarah 3.3% p.a. profitrate
1,000 10
2012
Government
of Turkey
Internaonal Sovereign Sukuk Al
Ijarah 2.8% p.a. profitrate
1,500 6
2012
Government
of
Qatar
Two Internaonal Sovereign Sukuk
issuances, avg profitrate of 2.67%
p.a. Al Ijarah
4,000 16
2012
Government
of
Indonesia
Thirteen DomescSovereign Sukuk
Issuances of various tenors, Al Ijarah
3,620 9
2012
Government
of
Pakistan
Six Domesc Sovereign
Sukuk Issuances, Al Ijarah
3,135 3
2012
Government
of
Dubai
Two Internaonal Sovereign Sukuk
issuances, Al Ijarah, avg. profitrate
4.39% p.a.
1,250 8
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It is also interesting to note that Sukukpricing are now beginning to be more attractive than conventional as theliquidity and investors demand are creating pricing tension in favour of the issuer. While the market continues tokeep risk aversion strategy intact, this we will most likely see continued Sovereign and Sovereign linked Sukuktotake centre stage.
Against this backdrop, the hunt for yield continued apace and this has been reflected in the strong performanceof some previously unloved but relatively higher yielding issuers.
While more depth is created in the Sukukmarket, the issuance of Non-Local Currency Sukukby foreign issuersis a positive development and will contribute in the growth of the Sukuk market. These issuances have alsohighlighted the need of currency hedging which is one of the key contributions of IIFM to the Islamic FinancialServices Industry and standards developed by IIFM will be extremely beneficial in the risk mitigation arising fromsuch Sukukissuances.
Following Table will give a clear picture on the Non-Local Currency hallmark global Sukukissuances during
last 2 years:
Table: 2 - Selectd hallmark NM currency Sukukissues 2011 Jan 2013
Most of the Sukukbeing issued of late has been fixed rate, which is good for the Sukuk issuer as it locks in itsfunding cost at historic low rate. While the investor may well be pleased with its fixed return for now, but as soonas the global economy shows signs of growth, the yield will jack up and the investor may carry a book loss. SinceIIFM has developed the ISDA / IIFM Tahawwut agreement, it would be prudent to keep an eye on the returnsand at some point consider hedging to lock in a profit and Islamic Profit Rate Hedging is already used by severalinstitutions based in GCC & Malaysia.
Issue
Year
Issuer
Issuance
Currency
Issuer
Country
Type of
IssuedSukuk
Structure
Amount in
MillionsUSD
Equivalent
Average
Tenor(Years)
2012 First Resources Ltd MYR Singapore Corporate Sukuk Al Musharakah 319 5
2012
NatonalBank of
Abu Dhabi
MYR
United Arab
Emirates
Corporate
Sukuk
Al
Murabahah
163 15
2012
Golden
Agri-Resources Ltd
MYR
Indonesia
Corporate
Sukuk
Al Murabahah
481 5
2012
Abu Dhabi Natonal
Energy Company
MYR
United Arab
Emirates
Corporate
Sukuk
Al Murabahah
212 10
2012
Noble Group
Limited
CYN
Hong
Kong
Corporate
Sukuk
Al
Murabahah
195.8 3
2012
UMW Toyota
Capital
MYR
Japan
Corporate
Sukuk
Al
Musharakah
89.56 4
2012
Bahrain
Mumtalakat
Holding Company
MYR
Bahrain
Sovereign
Sukuk
Al
Murabahah
97.44 5
2012 Axiata Berhad MYR Malaysia Corporate Hybrid Sukuk 157.85 2
2012
Development Bank
of Kazakhstan
MYR
Kazakhstan
Quasi-
Sovereign
Sukuk
Al
Murabahah
76.71 5
2012
Gulf Investment
Corporaton
MYR
Kuwait
Corporate
Sukuk
Al
Wakalah
101.08 13
2011
Gulf Investment
Corporaton
MYR
Kuwait
Corporate
Sukuk
Al
Wakalah
451 5
2011
Khazanah Nasional
Bhd
Malaysia
Quasi-
Sovereign
Sukuk
Al
Musharakah
78.2 3
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Following are landmark Fixed Profit Rate SukukIssuances during Jan 2011 Jan 2013 period :
Table: 3 - Landmark Fixed Profit Rate SukukIssuances
2.3 Distribution of the Global SukukIssuance by Issuer Status
During the post financial crisis until 2011, the appetite for the corporate risk, especially in GCC, was subdued andthe Sovereign issuers have been main driver of growth in Sukukmarket. The share of Sovereign has increased to54% as compare to sovereign market share of 34% during 2001 to 2010 period while corporate share has droppedto 38% from 63%.
24-Jan-13 Government of Dubai Sovereign Internaonal Sukuk AlIjarah 750 3.88%
16-Nov-12 Government of Indonesia Sovereign Internaonal Sukuk AlIjarah 1,000 3.30%
12-Nov-12 Abu Dhabi Islamic Bank Corporate Internaonal Hybrid Sukuk 1,000 6.38%
11-Oct-12 Qatar InternaonalIslamic
Bank
Corporate
Internaonal
Hybrid
Sukuk
700
2.69%
3-Oct-12 Qatar IslamicBank Corporate Internaonal Sukuk Al
Wakalah
750 2.50%
26-Sep-12 Government of Turkey Sovereign Internaonal Sukuk AlIjarah 1,500 2.80%
18-Jul-12 Emaar Properes, Dubai Corporate Internaonal Sukuk AlIjarah 500 6.40%
11-Jul-12 Government of Qatar Sovereign Internaonal Sukuk AlIjarah 2,000 2.10%
11-Jul-12 Government of Qatar Sovereign Internaonal Sukuk AlIjarah 2,000 3.24%
25-Jun-12
IslamicDevelopment Bank Quasi-
Sovereign
Internaonal
Sukuk Al
Wakalah
800
1.36%
19-Jun-12 JebelAli
Free
Zone,
Dubai
Corporate
Internaonal
Sukuk Al
Wakalah
650
7.00%
15-Jun-12 NaonalHigher Educaon
Fund Corporaon Malaysia
Quasi-
Sovereign
Domesc
Sukuk Al
Murabahah
789
3.85%
14-Jun-12
Johor Corporaon,Malaysia
Corporate
Domesc
Sukuk Al
Wakalah
564
3.84%
30-May-12
Dubai
IslamicBank,UAE Corporate
Internaonal
Sukuk
Al
Ijarah
500
4.75%
22-May-12
Banque
Saudi
Fransi
Corporate
Internaonal
Sukuk Al
Wakalah
750
2.95%
25-Apr-12 Government of Dubai Sovereign Internaonal Sukuk AlIjarah 650 6.45%
25-Apr-12 Government of Dubai Sovereign Internaonal Sukuk AlIjarah 600 4.90%
28-Mar-12 Saudi
Electricity
Company
Quasi-
Sovereign
Internaonal
Sukuk
Al
Ijarah
500
2.67%
28-Mar-12 Saudi
Electricity
Company
Quasi
Sovereign
Internaonal
Sukuk Al
Ijarah
1,250
4.21%
18-Jan-12
GeneralAuthority Of Civil
Aviaon,SaudiArabia
Quasi-
Sovereign
Domesc
Sukuk Al
Murabahah
4,000
2.50%
18-Jan-12 First Gulf Bank,UAE Corporate Internaonal Hybrid Sukuk 500 4.05%
30-Nov-11 Abu Dhabi Commercial
Bank,UAE
Corporate
Internaonal
Hybrid
Sukuk
500
3.78%
22-Nov-11 CentralBank of Bahrain Sovereign Internaonal Sukuk AlIjarah 750 6.27%
21-Nov-11 Government of Indonesia Sovereign Internaonal Sukuk AlIjarah 1,000 4.00%
25-Aug-11 NakheelGroup ,UAE Corporate Domesc Sukuk AlIjarah 1,034 10.00%
2-Aug-11 First Gulf Bank Sukuk,UAE Corporate Internaonal Hybrid Sukuk 650 3.80%
2-Jun-11 HSBC Bank Middle East
Limited,UAE
Corporate
Internaonal
Hybrid
Sukuk
500
3.58%
25-May-11
Islamic
Development
Bank
Quasi-
Sovereign
Internaonal
Sukuk Al
Wakalah
750
2.35%
3-Feb-11 Emaar Properes, Dubai Corporate Internaonal Sukuk AlIjarah 500 8.50%
Issue
Date
Issuer
Typeof
Issued
Sukuk
Internaonal
or
Domestc
Structure
Amount in
Millions
USD or USD
Equivalent
Rateof
Return
Per
Annum
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Table: 4 - Global SukukIssuances by Issuer Status 2001- Jan 2013
Following are the tables for Hall Mark SukukIssuances in Sovereign, Corporate and Quasi-Sovereign
Table: 5 - Global Sovereign SukukIssues -Selected Value Leaders 2011-2013 - Year wise latest first
US $ 100 Millions or greater (International & Domestic)
IssuerStatus
No. of
Issues
Value (USD
Millions)
% of Total
Value
Sovereign 1,034 255,506 54%
Corporate 2,743 179,416 38%
Quasi-Sovereign 98 37,762 8%
Total 3,875 472,683 100%
Issue
Year
Issuer
Number
ofIssues
Issuer
Country
Internaonal
or
Domesc
Structure
Amount in
MillionsUSD or USD
Equivalent
Average
Tenor(Years)
2013
Government
of
Dubai
1
United Arab
Emirates
Internaonal
Sukuk
Al
Ijarah
750
10
2012
Government of
Malaysia
7
Malaysia
Domesc
Sukuk Al
Murabahah
2,527
12
2012
Government of
Indonesia
1
Indonesia
Internaonal
Sukuk
Al
Ijarah
1,000
10
2012 Government of Turkey 1 Turkey Internaonal Sukuk Al Ijarah 1,500 6
2012
Central Bank of
Bahrain
1
Bahrain
Domesc
Sukuk
Al
Ijarah
424
5
2012 Government of Qatar 2 Qatar Internaonal Sukuk Al Ijarah 4,000 16
2012
Government of
Indonesia
13
Indonesia
Domesc
Sukuk
Al
Ijarah
3,620
9
2012
Government of
Pakistan
6
Pakistan
Domesc
Sukuk
Al
Ijarah
3,135
3
2012
Government
of
Dubai
2
United Arab
Emirates
Internaonal
Sukuk
Al
Ijarah
1,250
8
2011
Central Bank of
Bahrain
1
Bahrain
Internaonal
Sukuk
Al
Ijarah
750
7
2011
Government of
Indonesia
1
Indonesia
Internaonal
Sukuk
Al
Ijarah
1,000
7
2011
Government of
Indonesia
5
Indonesia
Domesc
Sukuk
Al Ijarah
2,033
10
2011 Government of 2 Malaysia Internaonal Sukuk Al 2,000 8
Malaysia Wakalah
2011 Government of Sudan 1 Sudan Domesc Hybrid Sukuk 286 5
2011
Government ofMalaysia
2
Malaysia
Domesc
Sukuk AlMurabahah
984
9
2011 Government of Qatar 1 Qatar Domesc Sukuk Al Ijarah 9,067 3
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Table: 6 - Global Corporate Sukuk Issues -Selected Value Leaders 2011- Jan 2013 -
Year wise latest first US $ 100 Millions or greater (International & Domestic)
Issue
Year
Issuer
Number
of
Issues
Issuer
Country
Internaonal
or
Domesc
Structure
Amount in
Millions
USD or USD
Equivalent
Average
Tenor
(Years)
2013 Sime Darby Berhad 2 Malaysia Internaonal Sukuk Al Ijarah 800 8
2013 Savola Group 1 Saudi Arabia Domesc Hybrid Sukuk 400 7
2013
MalakoffCorporaon
Berhad
3
Malaysia
Domesc
Sukuk
Al
Murabahah
696
9
2013 Segari Energy Ventures 1 Malaysia Domesc Sukuk Al Murabahah 559 15
2012
UEM Land Holdings
Berhad
1
Malaysia
Domesc
Sukuk
Al
Murabahah
196
5
2012
Banque
Saudi
Fransi
1 Saudi
Arabia
Domesc
Sukuk Al
Mudharabah
507
7
2012 Sime Darby Bhd 1 Malaysia Domesc Sukuk Al Murabahah 131 15
2012 First Resources Ltd 2 Singapore Internaonal Sukuk Al Musharakah 319 5
2012
NaonalBank of Abu
Dhabi
1
United Arab
Emirates
Internaonal
Sukuk
Al Murabahah
163
15
2012 Saudi Hollandi Bank 1 Saudi Arabia Domesc Sukuk Al Murabahah 373 7
2012 Imaz Sukuk Berhad 1 Malaysia Domesc Sukuk Al Musharakah 228 5
2012
Golden Agri-Resources
Ltd
1
Indonesia
Internaonal
Sukuk
Al
Murabahah
Sukuk
Al
Murabahah
481
5
2012
Abu
Dhabi
Islamic
Bank
1
United Arab
Emirates
Internaonal
1,000
Perpetual
2012
Qatar Internaonal
Islamic Bank
1
Qatar
Internaonal
Hybrid
Sukuk
700
5
2012 Qatar Islamic Bank 1 Qatar Internaonal Sukuk Al Wakalah 750 5
2012 HSBC Amanah 1 Malaysia Domesc Sukuk Al Wakalah 162 52012
Kuala Lumpur Kepong
Berhad
1
Malaysia
Domesc
Sukuk
Al
Ijarah
320
10
2012
MalakoffCorporaon
Berhad
1
Malaysia
Domesc
Sukuk
Al
Musharakah
576
30
2012 Celcom Transmission 5 Malaysia Domesc Sukuk Al Murabahah 1,442 8
2012 Tanjung Bin Power 9 Malaysia Domesc Sukuk Al Ijarah 1,101 12
2012
DanaInfra Nasional
Berhad
3
Malaysia
Domesc
Sukuk
Al
Murabahah
665
12
2012
Emaar
Properes
1
United Arab
Emirates
Internaonal
Sukuk
Al Ijarah
500
7
2012 Cagamas Berhad 1 Malaysia Domesc Sukuk Al Ijarah 132 5
2012
EmiratesIslamic
Bank
2
United ArabEmirates
Internaonal
SukukAl
Musharakah
1,000
6
2012 Olayan Group 1 Saudi Arabia Domesc Hybrid Sukuk 173 5
2012
Jebel
Ali
Free
Zone
1
United Arab
Emirates
Internaonal
Sukuk
Al Wakalah
650
7
2012 Johor Corporaon 3 Malaysia Domesc Sukuk Al Wakalah 941 7
16
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2012
Dubai
Islamic
Bank
1
United Arab
Emirates
Internaonal
Sukuk
Al
Ijarah
500
5
2012 Banque Saudi Fransi 1 Saudi Arabia Internaonal Sukuk Al Wakalah 750 5
2012
Saudi Arabia Naonal
Industrialisaon
Company
1 Saudi Arabia
Domesc
Hybrid
Sukuk
533
7
2012 Aman Sukuk Berhad 1 Malaysia Domesc Sukuk Al Musharakah 116 10
2012 Saudi Brish Bank 1 Saudi Arabia Domesc Hybrid Sukuk 400 5
2012 Al Marai Company 1 Saudi Arabia Domesc Hybrid Sukuk 267 7
2012
Abu Dhabi Naonal
Energy Company
1
United Arab
Emirates
Internaonal
Sukuk
Al
Murabahah
212
10
2012 Maxis Berhad 1 Malaysia Domesc Sukuk Al Musharakah 811 10
2012 DRB-HICOM Bhd 1 Malaysia Domesc Sukuk Al Murabahah 132 9
2012
Majid Al Fuaim
Properes 1
United Arab
Emirates
Internaonal
Sukuk
Al
Wakalah
400
5
2012 Sarawak Energy Bhd 2 Malaysia Domesc Sukuk Al Musharakah 801 13
2012
First
Gulf
Bank
1
United Arab
Emirates
Internaonal
Hybrid
Sukuk
500
5
2012
Tamweel
Funding
1
United Arab
Emirates
Internaonal
Hybrid
Sukuk
300
5
2011
Abu Dhabi Commercial
Bank
1
United Arab
Emirates
Internaonal
Hybrid
Sukuk
500
5
2011
Manjung Island Energy
Berhad 7
Malaysia
Domesc
Sukuk
Al
Ijarah
1,242
9
2011
Kuveyt Trk Kat l m
Bankas
1
Turkey
Internaonal
Hybrid
Sukuk
350
5
2011
Saudi Arabian Aramco
Total Services Company
1
Saudi
Arabia
Domesc
Sukuk
Al
Musharakah
1,000
14
2011 AmIslamic Bank Berhad 1 Malaysia Domesc Sukuk Al Musharakah 192 10
2011
Nakheel
Group
1
United Arab
Emirates
Domesc
Sukuk
Al
Ijarah
1,034
5
2011
SapuraKencana
Petroleum
1
Malaysia
Domesc
Sukuk Al
Mudharabah
158
5
2011
KencanaPetroleum
Bhd
1
Malaysia
Domesc
Sukuk AlMudharabah
167
5
2011
Gulf Investment
Corporaon
2
Kuwait
Internaonal
Sukuk
Al
Wakalah
451
5
2011
First
Gulf
Bank
1
United Arab
Emirates
Internaonal
Hybrid
Sukuk
650
5
2011 Almana Group W.L.L 1 Qatar Internaonal Sukuk Al Wakalah 215 5
2011 Sarawak Energy Bhd 4 Malaysia Domesc Sukuk Al Musharakah 990 9
2011
Saudi Internaonal
Petrochemical Company
1
Saudi
Arabia
Domesc
Sukuk Al
Mudharabah
480
5
2011
Bank Muamalat
Malaysia Berhad
1
Malaysia
Domesc
Sukuk
Al
Musharakah
132
10
2011
HSBC Bank Middle East
Limited
1
United Arab
Emirates
Internaonal
Hybrid
Sukuk
500
5
2011
Sharjah
Islamic
Bank
1
United Arab
Emirates
Internaonal
Sukuk
Al
Wakalah
400
5
2011 Al Rajhi Cement 1 Jordan Domesc Sukuk Al Ijarah 119 7
2011 Maybank Islamic 1 Malaysia Domesc Sukuk Al Musharakah 330 10
2011 Bank Al Jazira 1 Saudi Arabia Domesc Hybrid Sukuk 267 10
2011 Cagamas Berhad 1 Malaysia Domesc Hybrid Sukuk 131 5
2011
First Investment
Company
1
Kuwait
Domesc
Sukuk
Al
Wakalah
332
5
2011
Emaar
Properes
1
United Arab
Emirates
Internaonal
Sukuk
Al
Ijarah
500
6
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Table: 7 - Global Quasi-Sovereign SukukIssues -Selected Value Leaders 2011-2012
Year wise latest first US $ 100 Millions or greater (International & Domestic)
Following are chart on Domestic and International Sukuk market:
Chart 2: Total Global SukukIssuance (All Currencies) Breakdown by Issuer Status
It is no surprise that the domestic market is very much Sovereign lead, as the domestic market needs local currencyinstruments to manage their Liquidity while the domestic investors prefer to invest in their home currency so asnot to be exposed to currency risk.
Sovereign will certainly keep a bigger share of the local market as Islamic finance activities grows around theglobe, more countries will issue Sukukin their home currency as part of the Government own funding needs andto develop bench mark curve to facilitate growth of their domestic market.
Issue
Year
Issuer
Number
of
Issues
Issuer
Country
Internaonal
or
Domesc
Structure
Amount in
Millions
USD or USD
Equivalent
Average
Tenor
(Years)
2012
Malaysia Airports Capital
Berhad
1
Malaysia
Domesc
Sukuk
Al Ijarah
196
12
2012
Islamic
Development
Bank
2
Saudi
Arabia
Internaonal
Sukuk Al
Wakalah
1,300
5
2012
Khazanah
Nasional
Bhd
4
Malaysia
Domesc
Sukuk Al
Musharakah
1,450
15
2012
NaonalHigher Educaon
Fund Corporaon Malaysia
2
Malaysia
Domesc
Sukuk Al
Murabahah
1,118
10
2012
Malaysian Airline System
Berhad
2
Malaysia
Domesc
Sukuk Al
Musharakah
479
10
2012
Syarikat Prasarana Negara
Berhad
2
Malaysia
Domesc
Sukuk Al
Murabahah
642
13
2012 Saudi Electricity Company 2 Saudi Arabia Internaonal Sukuk Al Ijarah 1,750 8
2012
Khazanah
Nasional
Bhd
1
Malaysia
Internaonal
Sukuk Al
Musharakah
358
7
2012
General Authority Of Civil
Aviaon
1
Saudi
Arabia
Domesc
Sukuk Al
Murabahah
4,000
1
2012
PLUS
Berhad
23
Malaysia
Domesc
Sukuk Al
Musharakah
9,728
16
2011
Pengurusan Aset Air
Berhad
9
Malaysia
Domesc
Sukuk Al
Murabahah
2,576
7
2011
Syarikat Prasarana Negara
Berhad
2
Malaysia
Domesc
Sukuk
Al
Ijarah
673
13
2011
Islamic
Development
Bank
1
Saudi
Arabia
Internaonal
Sukuk Al
Wakalah
750
5
2011
Khazanah
Nasional
Bhd
1
Malaysia
Domesc
Sukuk Al
Musharakah
334
20
Domestc Sukuk Issuances 2001-2010
Sovereign,
(86,498)
47%
Corporate,
(93,022)
51%
Quasi-
Sovereign,
(4,104)2%
Quasi-
Sovereign,
(22,392)1
1%
Sovereign,
(148,132)
70%
Corporate
(40,210)
19%
Domestc Sukuk Issuances 2011-Jan 2013
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As the market is now recovering from the shock of the Global Financial crisis, Corporate sector will undoubtly willincrease their share, attracted by lower yield and investors demand for Sukuk.
In the international cross border market, Corporate were the earlier years dominant issuers but only afterSovereign or Quasi Sovereign laid the foundation that provided confidence in the Sukukas an acceptable andviable instrument. (Eg; Bahrain, Dubai, Malaysia, Qatar, and IDB)
The fallout from the Financial crisis lead investors to move towards safe haven investment strategy and theSovereign and Quasi Sovereign stepped up to provide confidence and stability.
In addition many new Sovereign / Quasi Sovereign issuer lent support to the Sukuk market, (Eg; Saudi CivilAuthourity, Turkey,). Not only these chunk size Sukukissuance from high credit quality issuer helped absorbedsome of the liquidity but in doing so, is paving the way for more Sovereign Debutant Sukuk.
Moreover, when putting the Global issues together from 2001 to Jan 2013, then the Sovereign and Quasi Sovereigntakes almost 62% of all issuance to date. Between 2011 and Jan 2013, surprisingly Qatar Sovereign came in asthe top issuer of combined Domestic and International with US $ 13 Billion, Indonesia with US $7.7 Billion andMalaysia with US $ 5.5 Billions. The standing changes considerably with Malaysia taking a handsome lead with US$ 36 Billions, followed by Qatar US $ 15 Billion, Saudi US $ 13 Billions and UAE with US $ 11 Billions when includingQuasi Sovereign and Corporate.
A healthy development in the SukukMutual Funds space is taking shape with number of banks having set uptheir own SukukFund to offer to their private clients, this is a positive sign, that the Sukukmarket is coming of age.Development of the SukukFund is timely, as the current split between Sovereign and Corporate risk is very muchdesirable, since it offers investors and fund managers with a good mix of Sovereign and Corporate risk to consider.The choice offers the fund manager to not only diversify credit risk but also take into account their risk returnprofile in allocating to their portfolio.
2.4 International SukukMarket
The year 2012 was record year in terms of International Sukukissuances and the year closed at US$ 20 billion Sukukissuances as compare to previous 2007 pre-crisis record of US$13.80 billion. Currently outstanding InternationalSukukfigure is approximately US$ 45 bio and it is expected that Q1 of 2013 will close with US$ 50 billion outstandingSukukmarket.
There were several landmark Sukukissuances from Malaysia, Qatar, Turkey, UAE, Saudi Arabia, Indonesia, Bahrainetc., this indicates that Sukukmarket has fully emerged from the declining trend witnessed in 2008 & 2009 andfurther double digit growth prospects are intact for next coming years and existing Sukukissuance pipeline is theconfirmation of this prediction.
International SukukIssuances 2001-2010 International SukukIssuances 2011-Jan 2013
Sovereign
(8,529)
18%
Quasi-
Sovereign
(6,953)
14%
Corporate,
(32,681)
68%
Corporate,
(13,502)
45%
Sovereign,
(12,347)
41%
Quasi-
Sovereign,
(4,313)14%
19
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The following table illustrates the regional break-up of the total international Sukukissuance during the
period of Jan 2001 Jan 2013:
Table: 8 - Regional Break-Up of the Total International SukukIssuance 2001-Jan 2013
ASIA & FAR EAST Number of Issues Amount USD Millions % of Total
Value
Malaysia
19 9,677 12.4%Indonesia
4 3,131 4%
Pakistan1 600 0.77%
Singapore2 319 0.41%
Hong Kong2 196 0.25%
Japan3 190 0.24%
Total31 14,113 18%
GCC & MIDDLE EAST Number of Issues Amount USD Millions % of Total
Value
Bahrain93 6,780 8.7%
Qatar 9 7,685 9.8%
Saudi Arabia15 9,990 12.8%
United Arab Emirates50 34,536 44.1%
Kuwait13 2,127 2.7%
Total180 61,119 78%
AFRICA Number of Issues Amount USD Millions % of Total
Value
Sudan1 130 0.17%
Total 1 1300.17%
EUROPE & OTHERS Number of Issues Amount USD Millions % of TotalValue
Turkey3 1,950 2.5%
Germany1 55 0.07%
UK3 282 0.36%
France1 1 0.00%
USA2 600 0.77%
Kazakhstan1 77 0.10%
Total11 2,965 4%
Grand Total 223
78,326
100%
20
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Table : 9 - Selected Value Leaders in International SukukMarket for Jan 2011- Jan 2013
(US $ 50 million or greater)
Issue
Year
Issuer
Number
of
Issues
Issuer
Country
Type of
Issued
Sukuk
Structure
Millions
USD
Average
Tenor
(Years)
2013 Sime Darby Berhad 2 Malaysia Corporate Sukuk Al Ijarah 800 8
2013 Government of Dubai 1 United Arab Emirates Sovereign Sukuk Al Ijarah 750 10
2012 FWU AG Group 1 Germany Corporate Sukuk Al Ijarah 55 7
2012
Abu Dhabi Islamic
Bank
1
United
Arab
Emirates
Corporate
Hybrid
Sukuk
1,000
Perpetual
2012
Qatar Internatonal
Islamic Bank
1
Qatar
Corporate
Hybrid
Sukuk
700
5
2012 Qatar Islamic Bank 1 Qatar Corporate Sukuk Al Wakalah 750 5
2012 Emaar Propertes 1 United Arab Emirates Corporate Sukuk Al Ijarah 500 7
2012
Emirates
Islamic
Bank
2
United
Arab
Emirates
Corporate
Sukuk Al
Musharakah
1,000
6
2012 Jebel Ali Free Zone 1 United Arab Emirates Corporate Sukuk Al Wakalah 650 7
2012 Dubai Islamic Bank 1 United Arab Emirates Corporate Sukuk Al Ijarah 500 5
2012 Banque Saudi Fransi 1 Saudi Arabia Corporate Sukuk Al Wakalah 750 52012
Majid Al Fuaim
Propertes
1
United
Arab Emirates
Corporate
Sukuk
Al
Wakalah
400
5
2012 First Gulf Bank 1 United Arab Emirates Corporate Hybrid Sukuk 500 5
2012 Tamweel Funding 1 United Arab Emirates Corporate Hybrid Sukuk 300 5
2012
Islamic Development
Bank
2
Saudi
Arabia
Quasi-
Sovereign
Sukuk
Al
Wakalah
1,300
5
2012 Saudi Electricity 2 Saudi Arabia Quasi- Sukuk Al Ijarah 1,750 8
Company Sovereign
2012
Khazanah Nasional
Bhd
1
Malaysia
Quasi-
Sovereign
Sukuk Al
Musharakah
358
7
2012
Government of
Indonesia
1
Indonesia
Sovereign
Sukuk
Al
Ijarah
1,000
10
2012 Government of Turkey 1 Turkey Sovereign Sukuk Al Ijarah 1,500 6
2012 Government of Qatar 2 Qatar Sovereign Sukuk Al Ijarah 4,000 16
2012 Government of Dubai 2 United Arab Emirates Sovereign Sukuk Al Ijarah 1,250 8
2011
Abu Dhabi
Commercial Bank
1
United
Arab Emirates
Corporate
Hybrid
Sukuk
500
5
2011
Kuveyt Trk Kat l m
Bankas
1
Turkey
Corporate
Hybrid
Sukuk
350
5
2011 First Gulf Bank 1 United Arab Emirates Corporate Hybrid Sukuk 650 5
2011 Almana Group W.L.L 1 Qatar Corporate Sukuk Al Wakalah 215 5
2011
HSBC Bank Middle
East Limited
1
United
Arab
Emirates
Corporate
Hybrid
Sukuk
500
5
2011 Sharjah Islamic Bank 1 United Arab Emirates Corporate Sukuk Al Wakalah 400 5
2011 Emaar Propertes 1 United Arab Emirates Corporate Sukuk Al Ijarah 500 6
2011
Islamic Development
Bank
1
Saudi
Arabia
Quasi-
Sovereign
Sukuk
Al
Wakalah
750
5
2011
Central Bank of
Bahrain
1
Bahrain
Sovereign
Sukuk
Al
Ijarah
750
7
2011
Government of
Indonesia
1
Indonesia
Sovereign
Sukuk
Al
Ijarah
1,000
7
2011
Government of
Malaysia
2
Malaysia
Sovereign
Sukuk
Al
Wakalah
2,000
8
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2.5 DomesticSukukMarket
As far as the domestic Sukukmarket is concern, Malaysia has the lions share in terms of both volume and value.Malaysia remains as the largest domestic Sukukissuer with 79.8% though the countries like Indonesia, Pakistan,Qatar and Saudi Arabia while Turkey has entered the market as new potential leader plus Yemen has also enteredthe Sukukmarket at domestic level. Bahrain has also kept its presence felt in Sukukissuances and has seen severallandmark issuances and issuance volume has increased by almost 50%. Qatar has also issued landmark Sukukissuances and its domestic Sukukmarket is growing quite rapidly.
The domestic Sukukmarket in a number of jurisdictions (as shown in table below) is becoming active particularlyIndonesia & Pakistan and central banks are providing avenues to Islamic banks and other investors to invest theirsurplus liquidity in government Sukukprograms designed to provide level playing field to the Islamic institutions.
The total outstanding Domestic Sukukat Dec 2012 stood at US$ 191 billion and it is expected that 2013 will closewith even higher figure as sovereigns, quasi sovereign & corporates in jurisdictions like Malaysia, Indonesia, Turkeyand several other countries including GCC are getting more active in Sukukissuances
Table: 10 - Regional break-up of the Total Domestic Sukuk Issuance 2001-Jan 2013
ASIA & FAR EAST Number of Issues Amount USD Millions % of TotalValue
Malaysia3026 314,820 79.8%
Indonesia146 12,029 3.1%
Pakistan43 6,045 1.5%
Brunei Darussalam84 3,929 1.0%
Singapore5 192 0.05%
Total3,304 337,015 85.5%
GCC & MIDDLE EAST Number of Issues Amount USD Millions % of Total
Value
Bahrain173 5,675 1.4%
Qatar3 9,548 2.4%
Saudi Arabia26 18,712 4.7%
United Arab Emirates13 8,218 2.1%
Kuwait1 332 0.08%
Jordan1 119 0.03%
Yemen2 253 0.06%
Total219 42,856 10.9%
AFRICA Number of Issues Amount USD Millions % of Total
Value
Sudan22 13,214 3.4%
Gambia104 78 0.02%
Total 126 13,2923.37%
EUOROPE & OTHERS Number of Issues Amount USDMillions %ofTotal Value
Turkey1 905 0.23%
Germany1 123 0.03%
USA1 167 0.04%
Total3 1,195 0.30%
GrandTotal 3,652
394