Global sukuk issuance to surpass US$35 bln
Posted on February 22, 2011, Tuesday
KUALA LUMPUR: Bank Negara is optimistic that the global sukuk issuance this year will surpass US$35 billion recorded in 2007 when it sustained the highest issuance level, says Governor Tan Sri Dr Zeti Akhtar Aziz.
Of the US$35 billion, Malaysia contributed US$13.8 billion, she said.
She said Malaysia was leading in the global Islamic finance industry, followed by the United Arab Emirates (UAE), Saudi Arabia, Indonesia and Bahrain, with the global sukuk (Islamic bond) market share standing at 62 per cent.
“From the approvals we have given and the Securities Commission has given, we believe the sukuk bond issuances will surpass the 2007 level this year,” she told reporters after delivering a keynote address at the launch of Bloomberg’s Enhanced Islamic Finance Platform here yesterday.
Earlier in her speech, Dr Zeti said global sukuk issuance last year exceeded that of 2009 by more than 20 per cent and against this positive growth, investors and issuers’ renewed confidence was evident.
She said the Islamic finance industry is set to be in an exciting period this year.
As at Feb 16, 2011, the government sukuk outstanding amount is RM81.5 billion whose maturity is expected to be RM45 billion.
Dr Zeti said last year also saw Malaysia’s evolution as a multi-currency sukuk origination platform, with four foreign currency sukuk issuances amounting to about US$3 billion.
This trend, she said, would benefit from the Bloomberg AIBIM Bursa Malaysia Sovereign Shariah Index developed by the Association of Islamic Banking Institutions Malaysia (AIBIM), Bursa Malaysia and Bloomberg launched today as part of the enhancement in the Islamic finance platform.
She said the ringgit sukuk index launch marked another significant milestone in the Malaysian Islamic financial environment as it measured performance of the ringgit-denominated Shariah-compliant government securities in addition to benchmarking purposes.
“This development has been part of the continuous support by AIBIM and Bursa Malaysia to further strengthen Malaysia’s position as the world’s leading sukuk market.
“The collaboration with AIBIM, Bursa Malaysia and Bloomberg is also expected to see a Ringgit corporate sukuk index in the offing,” she said.
Going forward, Dr Zeti said efforts are underway between Bank Negara and Bloomberg to broaden this initiative to develop a foreign currency sukuk index.
She said liberalisation of the financial markets is expected to attract more foreign currency sukuk issuance by sovereign entities, multilateral institutions and multinational corporations.
In further strengthening the infrastructure for the sukuk market, the Malaysian Electronic Clearing Corporation or MyClear, a wholly-owned subsidiary of Bank Negara, is also undertaking an initiative to promote cross-border financial transaction that is efficient, reliable and secured.
MyClear operates the country’s real time gross settlement system and securities depository system. — Bernama