Diversification of Islamic Financial Insturments
177
Islamic finance sector continues to grow boosted the by contribution of the Islamic banking
and non-banking institutions.
Table 77: Bahrain’s Sukuk Outstanding and Issued Volumes in 2015
Sukuk Volume Outstanding (USD million) 4,803
Number of Sukuk Outstanding 18
Sukuk Issuance Volume (USD million) 3,537
Number of Sukuk Issued 27
Source: Thomson Reuters, “Sukuk Preceptions & Forecast Study 2017”, p. 25
Figure 23: Bahrain’s Sukuk Issuance Trend (USD Billion, 2013-2015)
Source: TR report 2017
In keeping with Bahrain's leadership in Islamic finance, the CBB has taken initiatives to
promote the development of the Islamic asset management industry. This includes the
development of a new investment business rulebook that provides guidelines for asset
management, fund administration and custody services. Furthermore, the Collective
Investment Undertakings (CIUs) rule allows for a full range of investment funds catering to
various types of investors, from retail to high net worth individuals and institutional investors.
CBB also expanded the variety of funds that can be established in Bahrain, by introducing rules
governing Real Estate Investment Trusts (REITs) and Private Investment Undertakings (PIUs),
which target sophisticated investors such as High Net-Worth Individuals and Institutional
investors exclusively.
As a result, the market in Bahrain has witnessed the development of a wide range of Shariah
compliant funds including equity, commodity, real estate and Ijarah funds that caters to the
needs of a growing middle class investors and structural reforms that encourage private and
public pensions. Overall, there are 97 Islamic funds that are incorporated and registered in
Bahrain with total assets under management amounting to US$1.2 billion, out of US$9 billion
in total fund investment, as of March 2017 (Al Baker, 2017)173.
All in all, the CBB has contributed immensely to the development of Bahrain’s Islamic capital
market products by designing a series of policy initiatives and regulatory changes and
upgrades. The following are furthering examples of institutions which contributed in the
evolution of the Islamic capital market:
173 Al Baker, A. (2017) Strengthening the Regional Asset Management Industry. Keynote Speech at the Middle East Assets
Management Forum 2017. Manama, Bahrain: 15 May 2017. Available online at
middle_east_asset_management_forum.htm
1,68
2,46
3,54
2013 2014 2015