Global sukuk market resumed positive strides in 2016 after three years of consecutive decline following its peak in 2012. Along with its rebound, the sukuk market also witnessed an important shift where corporate issuers dominated the market in 2016 with USD47.3 billion volume of issuance, representing a share of 63.2%. This is in contrast to historical trends where issuance was driven largely by sovereigns.
In 2016, global sukuk market witnessed a rebound after three consecutive years of decline following its peak in 2012. Global sukuk issuance posted a solid growth of 13.2% from previous year to reach USD74.8 billion. Overall, sukuk issuer profile remained broadly similar to historical trends, with Malaysia continued to be the main driver for sukuk issuance for the year, commanding a market share of 46.4% of total issuances, followed by Indonesia and the United Arab Emirates (UAE), accounting for 9.9% and 9.0% share, respectively.
Total issuances of GCC countries stood at USD19.6 billion, compared to USD18 billion in the previous year, driven by higher issuances from sovereigns. Higher issuances from this region suggested sukuk remain an important source of funding in financing their budget deficits amidst low oil prices and export earnings. Elsewhere, Turkey recorded a notable rise in sukuk issuance at USD4.1 billion for the year, supported by a number sovereign issuances with maturity ranging from one to five years. The year 2016 also witnessed issuances from Senegal, Jordan, Ivory Coast and Kuwait.
Global sukuk outstanding increased to a record of USD349.1 billion as of December 2016, an 8.7% increase from USD321.2 billion as at end-2015. By domicile, Malaysia’s secondary sukuk market stood at USD183.8 billion, representing a share of 52.6% of total sukuk outstanding. This was followed by Saudi Arabia and the UAE with market share of 16.3% and 8.9%, respectively.