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Sunday, 10 April 2016

GLOBAL SUKUK ISSUANCE SLIDES 43PC IN 2015

Singapore—Global issuance of Islamic bonds, or sukuk, declined 43% on the year in 2015 due to the sharp fall in commodity prices and a policy change by Malaysia, according to a financial standards organization. The total value of new sukuk issues fell to $60.7 billion from $107 billion a year earlier after Malaysia, the largest issuer, suspended sales of short-term local-currency sukuk, which were used as an investment tool rather than for liquidity management, the International Islamic Financial Market said in a report released Tuesday.


The Bahrain-based IIFM also attributed the drop to global uncertainty stemming from the steep decline in oil prices, and talk of interest rate hikes in the U.S. The industry went through a “consolidation phase” last year, following record-high sukuk issues exceeding $100 billion between 2012 and 2014, the organization said. Around two-thirds of the issues in value terms — $39.8 billion — were denominated in local currencies, reflecting demand in the key markets of Malaysia, Saudi Arabia and Bahrain. However, the value of local-currency sukuk in 2015 was only half that of the previous year after Malaysia, which accounted for 66% of total sales, decided in January to halt sales of sukuk with maturities of less than one year amid a fall in the value of the ringgit. The value of other local-currency sukuk issues grew marginally in 2015, rising to $13.5 billion from $12.5 billion in 2014, sustained by interest from Indonesia, Bahrain and Turkey.



Meanwhile, international sukuk that is, those denominated in major foreign currencies such as the dollar fell 21% to $20.9 billion due to economic uncertainty and the maturing of a few long-term bonds that were not reissued. Out of the total outstanding sukuk as of Dec.31, 2015, Malaysia accounted for 57%, followed by Saudi Arabia with 17%, United Arab Emirates with 10%, Indonesia with 6% and Qatar with 4%.



The corporate sector accounted for 44% of the issues in value terms while sovereign issuers made up 34% and quasi-sovereign issuers 22%.IIFM predicts that although sukuk issuance in 2016 may be hampered by the slowdown in the global economy, the overall direction will remain “positive.” “The appeal of sukuk will sustain the issuance in 2016,” said Ijlal Alvi, CEO of the organization. He added that the number will pick up as issuance from the corporate sector and project financing gains steam. Newcomers such as Indonesia and Turkey may reduce Malaysia’s market share in the coming years, he said.



(Pakistan observer / 07 April 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

MEEZAN BANK SUPPORTS ISLAMIC FINANCE RESEARCH INDUSTRY

Karachi—In an effort to support the development of Islamic finance research industry, Meezan Bank rewarded Raheel Jawed student of Institute of Business Administration (IBA), one of the leading business schools of the country for securing first position in ‘Islamic Banking and Finance’ course. Raheel was awarded with a cash award of Rs 50,000/- by Irfan Siddiqui, President & CEO Meezan Bank at a prize distribution ceremony organized at the Bank’s Head Office on 30th March, 2016.


Siddiqui praised the institute for its valuable contribution to Islamic finance education. The move forms part of the Bank’s efforts to encourage participation and interest of emerging and new talents in Islamic banking and finance. Referring to the recent activities at IBA CEIF (Centre for Excellence in Islamic Finance), a joint effort of Meezan Bank and IBA, Siddiqui said that this centre is positioned and capable of leading the way forward, developing outstanding leaders who can deliver exceptional Islamic banking services and contribute to the industry at large.



The initiative comes within the Bank’s strategy to foster high quality talent for the Islamic banking industry. 

Currently, Meezan Bank focuses on university students in order to garner their interest towards Islamic finance during their graduate and under-graduate studies. The Islamic banking course offered at IBA will enable students to realize the centrality of Islamic finance as a sub-discipline of Finance. Through such and similar initiatives, the Bank aims to contribute to the Islamic banking talent pool.


(Pakistan Observer / 10 April 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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