According to the Fitch Rating Dubai data, the global Sukuk issuances surged by 36.1 per cent in 2021 to $252.3 billion from $ 174.64bn in 2020. The growth momentum has continued despite Covid-19 and economic challenges.
The main players in the Sukuk market are central banks, governments and multilateral institutions. It is interesting to note that Malaysia, Indonesia, Turkey and Pakistan accounted for $230.2bn (91pc) of total Sukuk deals and have emerged as leading players in developing Islamic capital market instruments.
In August, the Central Bank of Russia announced the launch of an experiment on the introduction of Islamic banking in the country. Chechnya and Dagestan are selected as pilot regions.
“The Chechen Republic and the Republic of Dagestan have been proposed by the Ministry of Finance of the Russian Federation as subjects of this project and are enshrined in the instruction of the president. The issue is being worked out by the Ministry of Finance of Russia with the participation of the Bank of Russia, including the preparation of amendments to legislation. Direct piloting on the territory of the subjects of the Russian Federation — participants of the experiment is expected in 2023, " the Central Bank of Russia said in a statement.
The modern (traditional) financial system, based in fact on usury, for objective reasons begins to reach its limits, and humanity is coming to a dead end. The world's central banks and financial regulators around the world have fewer and fewer tools to control the situation. As a result, we see a lot of distortions in the economy, high inflation in various parts of the world, and many countries are starting to print more and more money in an attempt to “plug the holes”.
When the bubble bursts
In fact, the US Federal Reserve System is engaged in the so-called soft default, that is, it does not conduct a hard default, in which the insolvency of the state is declared, but a soft one, when debts to the whole world increase from year to year and the cost of this debt decreases by printing even more money. Of course, this is super-unfair, this state of affairs cannot last forever. Many people understand that everything will eventually come to a standstill. Yes, this process can be stretched over time, but it cannot continue indefinitely.
Islamic finance is the very path that humanity has. The introduction of Islamic finance, following the principles on the basis of which they function, would save people from a large number of financial problems. Financial markets, as we can see, are inflated like soap bubbles. Financial systems are “overheated”, goods and services are becoming much more expensive as more money is thrown into the economy.
The Fed and central banks of countries print a lot of money to “put out fires.” People and institutions are starting to buy out various financial instruments because they have no other alternatives for investment due to the fact that interest rates are very low, and people are starting to invest in everything because of an increased risk. People's appetites are growing, the existing financial system motivates them to inflate the prices of all kinds of assets. When these processes become difficult to manage, regulators introduce new measures, for example, raising interest rates, reducing the amount of money in the economy, which ultimately leads to a decline in the economy and the loss of considerable capital by the population. We must not forget that these mechanisms are accompanied by some excitement among people, because there is an opportunity to earn a lot quickly and lose everything in a moment.
Islamic finance will become prevalent in Russia as well
With Islamic finance, all these things go into oblivion. The distribution of resources is more equitable. From the point of view of risk sharing and responsibility, creditors act as a single object — this is how it should be in the system of Islamic finance based on justice. Now it is happening quite differently: lenders are relieving themselves of all risks, shifting them to the borrower as much as possible. However, this problem is solved — it is enough to introduce Islamic finance. In Islamic finance, money acts as a medium of exchange, and not as an asset or commodity, as it happens in many economies of the modern world.
Accordingly, the pilot implementation and further development of Islamic finance in Russia and in the world as a whole will gradually lead to the understanding that there is a real alternative to the existing system: economy can be built more fairly, harmoniously and honestly in relation to all participants in the financial market.
One possible driver for its supporters is the fact it is perhaps the only crypto in the world that actually gives back to its community, which is potentially 2 billion strong. Islamic Coin diverts 10% of every issuance to charitable causes. Its decentralized nature, its ethical philosophy and its sustainable approach have clearly played a role, if the Executive Board is anything to go by.
With the bear market actively wreaking havoc every day, one crypto has defied all sentiment, securing $200m during its private sale from high net worth investors worldwide, making it perhaps the biggest success of 2022. Evidently seen as a safe haven by many top players, Islamic Coin has managed this in only 2 weeks, with its private sale still ongoing.
The year 2022 is positioned for growth for Qatar’s Islamic finance institutions as the economy expands in the run-up to the FIFA World Cup 2022.
Qatar’s Islamic finance sector is well placed to overcome any lingering challenges according to Oxford Business Group (OBG) report.
The Republic of Senegal, through the Société Nationale de Gestion et d’Exploitation du Patrimoine Bâti de l’État (SOGEPA SN), has sold XOF 330bn (around $525.4m) in three-tranche Sukuk Ijarah, attracting orders from regional and Middle Eastern investors.
The first tranche is a seven-year Sukuk; the second is a 10-year tranche, and the third tranche holds a 15-year tenor.
The Sukuk certificates will be listed on the Bourse Regionale des Valeurs Mobilieres.
For the first time Iran will introduce takaful (insurance) for its Sunni population, which is less than 10 million out of the country’s 85 million people. Amin Re has applied for a takaful licence to operate on Kish Island, off the country’s south coast. According to the Financial Tribune, citing Risknews, Amin Re submitted application both to the country’s regulatory body and the Kish Island Free Trade Zone Organisation.
The Islamic financial industry in Saudi Arabia has a prominent position in the world, with nearly SR3 trillion ($799.7 billion) of total assets, the Saudi Central Bank Deputy Governor for Research and International Affairs, Fahad Abdullah Al-Dossari, said.
This represents approximately 28 percent of the total Islamic financial assets globally, making the Kingdom the first in the world, according to the report of the Islamic Financial Services Board issued in 2021, Al-Dossari said in a seminar on April 25.
GCC-based financial institutions took the lead in environmental, social and governance (ESG) sukuk issuance, comprising green and sustainability-linked sukuk in the first quarter of 2022, according to global data provider Refinitiv.
The issuances, most of which came from the energy and utilities sectors, reached $2.4 billion in Q1 2022, slightly lower than the $2.5 billion issued during the same period in 2021. The debut issuance of $900 million from Bahrain-based Infracorp, the infrastructure investment arm of Gulf Finance House, was the largest ESG sukuk issued during the quarter.
Shariah Experts Ltd. has become the world’s first halal advisory firm to issue shariah compliance certificates on blockchain in the form of non-fungible tokens (NFTs).
The halal NFT certificates are minted and issued by the firm on Souq NFT, which is powered by MRHB DeFi, an ethical decentralised finance (DeFi) platform. Singapore-based gold crypto platform Cache.Gold has become the first receiver of the halal certification in the form of NFT.
With Islamophobic sentiments tainting the Islamic finance market, Muslim-owned businesses in Europe face the consequences.
The global Islamic finance market will likely experience a stable and potentially sustainable growth in 2022, according to S&P Global Ratings’ 2022 edition.
The finance industry that is in accordance with Islamic law, is expected to increase by 10 to 12% this year.