The Riyadh skyline. The first-half sale of Sharia-compliant bonds issued by Saudi Arabia helped boost global sukuk issuance volumes. Reuters
The Riyadh skyline. The first-half sale of Sharia-compliant bonds issued by Saudi Arabia helped boost global sukuk issuance volumes. Reuters
The Riyadh skyline. The first-half sale of Sharia-compliant bonds issued by Saudi Arabia helped boost global sukuk issuance volumes. Reuters
The Riyadh skyline. The first-half sale of Sharia-compliant bonds issued by Saudi Arabia helped boost global sukuk issuance volumes. Reuters

Global sukuk issuance may hit $155bn in 2021, S&P says


Sarmad Khan
  • English
  • Arabic

Global sukuk issuance is set to increase to as much as $155 billion in 2021, or 11 per cent more than $139.8bn last year, driven by low interest rates and abundant liquidity, according to S&P Global Ratings.

The ratings agency said a more conservative outlook could be in the range of $140bn. Sukuk worth a record $167bn was issued in 2019.

A continued economic recovery, vaccination campaigns in most Islamic finance countries and oil prices of about $65 a barrel this year will also support growth in sukuk issuance, the rating agency said in its market report on Monday.

“Taken together, these factors point to stronger sukuk market performance in 2021 compared with 2020,” said Mohamed Damak, global head of Islamic finance at S&P.

Global sukuk issuance stood at $90.6bn in the first half of the year, slightly more than $86.4bn recorded in the six months to the end of June 2020.

The market's performance was propelled by Sharia-compliant bond sales in Malaysia, Saudi Arabia and Oman. The sultanate returned to the market after issuing conventional debt in 2020.

The market was also supported by a higher primary issuance volume, which rose by 20 per cent in the first half of 2021.

“Absent an unexpected geopolitical event, a significant drop in oil prices or a shift in liquidity conditions on global capital markets, we expect sukuk issuance will continue to rise,” said Mr Damak.

However, issuance volumes in Bahrain, Indonesia, Turkey and the UAE declined. In Turkey, the decline was mainly due to the rise in local currency-denominated issuances while the UAE's sukuk sales dropped as the country adopted new Sharia standards.

“Despite higher oil prices and lower fiscal deficits, we expect that some sovereigns in the Gulf Cooperation Council will continue to tap the market to fund their economic diversification programmes,” S&P said.

It also expects bank and corporate issuance to “continue to support sukuk market performance" in the second half of 2021, after a muted activity in 2020 when companies preserved cash at the height of the pandemic and deferred capital expenditure.

Sukuk worth about $20bn is set to mature in the second half of this year, some of which will probably be refinanced through the market, S&P said.

Central banks around the world have introduced monetary stimulus measures last year to support the banking sector and help stabilise financial markets as part of their efforts to soften the blow of the pandemic on their economies.

Absent an unexpected geopolitical event, a significant drop in oil prices or a shift in liquidity conditions on global capital markets, we expect sukuk issuance will continue to rise
Mohamed Damak,
global head of Islamic finance at S&P

Interest rates, which have been set near or below zero in many countries, are expected to remain low this year and beyond as the world economy continues to recover.

The International Monetary Fund expects the global economy, which last year slid into its worst recession since the Great Depression, to expand by 6 per cent in 2021.

The $2.4 trillion Sharia-compliant finance industry is expected to register “low to mid-single digit growth” in 2021. It grew by 11.4 per cent in 2019 on the back of higher-than-expected sukuk issuance, according to S&P Global.

The industry is expected to hit $3.69tn in 2024, according to Refinitiv and a report by the Islamic Corporation for the Development of the Private Sector.

Sustainability-linked and green sukuk issuance will also support the global Islamic bond market in the second half of this year. However, the volume of such Sharia-compliant instruments is expected to remain limited, S&P said on Monday.

During the first half, the Islamic Development Bank issued sukuk worth $2.5bn and said it would use 10 per cent of the proceeds to finance green projects, with 90 per cent earmarked for social development programmes. Malaysia also issued a $1.3bn Islamic bond that included an $800 million sustainability tranche.

“Although these types of instruments may appeal to investors with ESG [environment, social and governance] objectives – and we expect to see more of them – we think that they will be the exception rather than the norm,” said Mr Damak.

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

Our legal advisor

Rasmi Ragy is a senior counsel at Charles Russell Speechlys, a law firm headquartered in London with offices in Europe, the Middle East and Hong Kong.

Experience: Prosecutor in Egypt with more than 40 years experience across the GCC.

Education: Ain Shams University, Egypt, in 1978.

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Ways to control drones

Countries have been coming up with ways to restrict and monitor the use of non-commercial drones to keep them from trespassing on controlled areas such as airports.

"Drones vary in size and some can be as big as a small city car - so imagine the impact of one hitting an airplane. It's a huge risk, especially when commercial airliners are not designed to make or take sudden evasive manoeuvres like drones can" says Saj Ahmed, chief analyst at London-based StrategicAero Research.

New measures have now been taken to monitor drone activity, Geo-fencing technology is one.

It's a method designed to prevent drones from drifting into banned areas. The technology uses GPS location signals to stop its machines flying close to airports and other restricted zones.

The European commission has recently announced a blueprint to make drone use in low-level airspace safe, secure and environmentally friendly. This process is called “U-Space” – it covers altitudes of up to 150 metres. It is also noteworthy that that UK Civil Aviation Authority recommends drones to be flown at no higher than 400ft. “U-Space” technology will be governed by a system similar to air traffic control management, which will be automated using tools like geo-fencing.

The UAE has drawn serious measures to ensure users register their devices under strict new laws. Authorities have urged that users must obtain approval in advance before flying the drones, non registered drone use in Dubai will result in a fine of up to twenty thousand dirhams under a new resolution approved by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.

Mr Ahmad suggest that "Hefty fines running into hundreds of thousands of dollars need to compensate for the cost of airport disruption and flight diversions to lengthy jail spells, confiscation of travel rights and use of drones for a lengthy period" must be enforced in order to reduce airport intrusion.

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Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”

SERIE A FIXTURES

Friday Sassuolo v Torino (Kick-off 10.45pm UAE)

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Sunday Cagliari v Crotone (3.30pm) 

Benevento v Napoli (6pm) 

Parma v Spezia (6pm)

 Fiorentina v Udinese (9pm)

Juventus v Hellas Verona (11.45pm)

Monday AC Milan v AS Roma (11.45pm)

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


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Founder: John Tsioris and Ioanna Angelidaki

Based: Dubai

Sector: Online grocery delivery

Staff: 200

Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends

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UAE currency: the story behind the money in your pockets

Pupils in Abu Dhabi are learning the importance of being active, eating well and leading a healthy lifestyle now and throughout adulthood, thanks to a newly launched programme 'Healthy Lifestyle'.

As part of the Healthy Lifestyle programme, specially trained coaches from City Football Schools, along with Healthpoint physicians have visited schools throughout Abu Dhabi to give fun and interactive lessons on working out regularly, making the right food choices, getting enough sleep and staying hydrated, just like their favourite footballers.

Organised by Manchester City FC and Healthpoint, Manchester City FC’s regional healthcare partner and part of Mubadala’s healthcare network, the ‘Healthy Lifestyle’ programme will visit 15 schools, meeting around 1,000 youngsters over the next five months.

Designed to give pupils all the information they need to improve their diet and fitness habits at home, at school and as they grow up, coaches from City Football Schools will work alongside teachers to lead the youngsters through a series of fun, creative and educational classes as well as activities, including playing football and other games.

Dr Mai Ahmed Al Jaber, head of public health at Healthpoint, said: “The programme has different aspects - diet, exercise, sleep and mental well-being. By having a focus on each of those and delivering information in a way that children can absorb easily it can help to address childhood obesity."

RESULTS

 

Catchweight 63.5kg: Shakriyor Juraev (UZB) beat Bahez Khoshnaw (IRQ). Round 3 TKO (body kick)

Lightweight: Nart Abida (JOR) beat Moussa Salih (MAR). Round 1 by rear naked choke

Catchweight 79kg: Laid Zerhouni (ALG) beat Ahmed Saeb (IRQ). Round 1 TKO (punches)

Catchweight 58kg: Omar Al Hussaini (UAE) beat Mohamed Sahabdeen (SLA) Round 1 rear naked choke

Flyweight: Lina Fayyad (JOR) beat Sophia Haddouche (ALG) Round 2 TKO (ground and pound)

Catchweight 80kg: Badreddine Diani (MAR) beat Sofiane Aïssaoui (ALG) Round 2 TKO

Flyweight: Sabriye Sengul (TUR) beat Mona Ftouhi (TUN). Unanimous decision

Middleweight: Kher Khalifa Eshoushan (LIB) beat Essa Basem (JOR). Round 1 rear naked choke

Heavyweight: Mohamed Jumaa (SUD) beat Hassen Rahat (MAR). Round 1 TKO (ground and pound)

Lightweight: Abdullah Mohammad Ali Musalim (UAE beat Omar Emad (EGY). Round 1 triangle choke

Catchweight 62kg: Ali Taleb (IRQ) beat Mohamed El Mesbahi (MAR). Round 2 KO

Catchweight 88kg: Mohamad Osseili (LEB) beat Samir Zaidi (COM). Unanimous decision

Updated: July 05, 2021, 12:17 PM`