Diversification of Islamic Financial Insturments
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Corporate Sukuk Issuances
Post the financial crisis, the corporate issuers have relatively been shy of issuing large Sukuk,
with 2016 Sukuk issuances amounting to estimated USD 15.4 billion, a 25.7% decline from the
previous year USD 20.7 billion as reported by IFSB (May 2017).
The downward trend commenced in 2013, starting with the US Federal Reserve’s first
indications in mid-2013, and eventual decision in early 2014, to gradually begin scaling back
its quantitative easing programme, leading to concerns of rising global interest rates; this has
been followed in 2015–2016 with socio-political and macroeconomic challenges in various
regions of the global economy, leading to subdued economic growth performances.
The year 2016 witnessed notable issuances by GCC based banks, who issued tier 1 Sukuk to
comply with Basel III requirements, such as Dubai Islamic Bank (US$500 million), Abu Dhabi
Islamic Bank (US$1,000 million), Noor Bank (US$500 million), and Bank Al Jazira (US$533
million).
In terms of structure of Corporate Sukuk issuances, Ijarah and Murabaha Sukuk has been
popular over the last decade with almost 55% of all issuances based on these two contracts.
The following table gives a snapshot of the Corporate Sukuks by contract
Figure 5: Corporate Sukuk and Soveriegn Sukuk by Contracts 2001-2016
Source: IIFM 2017
Musharakah; 16%
Murabaha; 8%
Mudarabah; 11%
Wakalah; 23% Hybrid; 3%
Exchangeable; 7%
Ijarah; 32%