The primary market sukuk issuances volume reached USD44.5bln as at end 4M14 and this volume is 1.6% higher than the USD43.8bln volume in 4M13.
The issuances were led by sovereign and quasi-sovereign issuers who collectively accounted for approximately 82% or USD36.5bln of the total issuances. The issuance momentum has varied m-o-m with a generally slow start in 2014 on account of higher funding costs stemming from the US Fed’s tapering exercise that sent yields on fixed income instruments spiralling upwards, particularly in emerging markets.
In Mar-14, corporate sukuk issuances notably slowed down on account of an absence of GCC-based issuers following an intra-GCC diplomatic dispute. Finally, April’s monthly issuance volume of more than USD13.4bln marks it as the most performing month for 2014 YTD and the third most performing month in the last 12 months. Overall, the performance of the primary market in 2014 YTD has set an optimistic outlook for the remainder of this year and with a healthy and diverse pipeline in place for 2014, which includes debut issuances from the UK, Luxembourg, South Africa, Hong Kong and Tunisia, the prospects are bright moving forward with annual issuances expected to once again exceed the USD100bln mark this year.
Download full report: KFH Islamic Finance Report