$211 Billion Value of Existing Instruments in The World

Indicated company KFH Research Ltd., a subsidiary of Kuwait Finance House (KFH), the study has been discussed in the International Islamic Finance Forum is being held in Malaysia, about market developments of global bonds in the past few years and the outlook on them, that the global sukuk market booming remarkable During the last six years, grew 28.3%, bringing the total versions of existing instruments in the world until the first half of 2012 to 210.8 billion dollars, is expected to witness this market for another year of development in 2013.

sukuk bondsAt first study highlighted the sector instruments, indicating that he has emerged as one of the key components of the Islamic finance. The Sukuk market has grown over the years at a compound annual growth rate of 28.3% in the period between 2006 and the first half of 2012 to reach existing instruments to $ 211 billion and contributed 13.4% of the global Islamic financial assets in 2011.

The study pointed out that Malaysia still maintains the first position in terms of size versions of the instruments of more than $ 234 billion issued in Malaysia until the end of the first half of 2012.

In the GCC countries has reached instruments 92.4 billion dollars, and for market instruments initial, Malaysia representing 71.6% of the versions of the new instruments in 2011, followed by Qatar (10.9%), then the United Arab Emirates (4.8%), and comes Saudi Arabia IV (3.2%).
As at the end of the first half of 2012, the study showed that the share of the Malaysian market accounted for 68.2%, and finally Saudi Arabia II (11.1%), and then the United Arab Emirates (6.4%), followed by Indonesia (5.9%).

The sectors that included regarded as a prime mover for sukuk issuance during the first half of 2012 the government sector increased by 54.7% and the transport sector increased by 22.1%, while came a large number of versions in the Gulf Cooperation Council (GCC) and Malaysia from the energy and utilities sectors.

And maintained sovereign sukuk issues on the bulk of the versions of the primary market over the past few years with governments to increase their local programs.
And played the new countries in the field of instruments role in increasing the number of sovereign issues, such as Saudi Arabia and Indonesia, which has grown two international instruments market to attract new investments.

Despite the increase in the volume of money that is pumped through sukuk issuance, but the amount that was released U.S. dollar is still small compared to growth in other currencies.

The main reason is that international instruments are agitated by sovereign issues, which tend to focus on domestic liquidity levels while requiring foreign currency transactions greater than setup, as well as increased exposure to foreign currency risk involved in foreign exchange transactions.

Malaysian Ringgit continued during the first half of 2012 being the most important currency, and accounted for 70% of total releases.

The existing global instruments reached $ 211 billion in the first half of 2012, an increase of 18.3% from the end of 2011 was $ 178.2 billion.

Noted study «KFH Research» progress and increase the total amount of instruments based on an ongoing basis, even during the financial crisis, and accelerated growth in recent years as a result of the large increase in the number of issuers of new and increasing amounts of the bodies sovereign and central banks. Has grown secondary sukuk market at a CAGR 28.1% in the period between 2006 and 2011.

In terms of performance Total revenue instruments, the total return on index HSBC / NASDAQ SK NBA, which measures the return of versions portfolio instruments emerging that consists of 33 currency-denominated U.S. dollar and the pound sterling and the Japanese yen and the euro, 5.12% during the first half first of 2012, a percentage slightly less than the 5.2% recorded during the first half of 2011 and also less than the figure recorded during the first half of 2010 and of 5.64%.


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