IIFM CEO Ijlal A Alvi said the forecast is based on pipeline of issues planned and expectations of sustained demand for funds from existing Islamic financial centres and potential issuers of Shariah-based bonds from a variety of countries such as Mexico, Indonesia, Kenya and Turkey as Islamic finance gains more mainstream acceptance.
Total sukuk issues are expected to cross the US$130 billion mark this year. The world sukuk issuance crossed landmark US$100 billion mark in 2012 when a total of US$137.45 billion was raised by corporate year while Cagamas Bhd postponed a US$2.5 billion multi-currency programme.
Domestic sukuk issue are likely to remain healthy with sustained interest from sovereign, corporate and quasi-sovereign issuers.
Recent news suggest Indonesia will see a 20 trillion rupiah retail sukuk in the first-half (1H) of 2015. Others like 1Malaysia Development Bhd (1MDB) could raise as much as RM8.4 billion in the same period.
The local currency sukuk issue pipeline remain healthy with another of Malaysia’s sovereign fund Khazanah Nasional Bhd planning to raise RM1.5 billion from a sukuk programme in 1H of 2015 while low-cost carrier AirAsia Bhd and Bank Islam Malaysia Bhd are each expected to issue RM1 billion worth of sukuk next year.
The IIFM is also spearheading a drive for the standardisation of legal documentation involving the sukuk issuance process driven by the aim to bring greater clarity for investors, issuers and other market participants and facilitate a more robust market.