A view of Bahrain’s financial district in the capital city of Manama. Bahrain and Dubai have issued dual tranche bonds and sukuk this year, says Lootah Global Capital's Lim Say Cheong. Reuters
A view of Bahrain’s financial district in the capital city of Manama. Bahrain and Dubai have issued dual tranche bonds and sukuk this year, says Lootah Global Capital's Lim Say Cheong. Reuters
A view of Bahrain’s financial district in the capital city of Manama. Bahrain and Dubai have issued dual tranche bonds and sukuk this year, says Lootah Global Capital's Lim Say Cheong. Reuters
A view of Bahrain’s financial district in the capital city of Manama. Bahrain and Dubai have issued dual tranche bonds and sukuk this year, says Lootah Global Capital's Lim Say Cheong. Reuters

How can sukuk issuers become more relevant in global capital markets?


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Over a 10-year period between 2009 and 2019, the annual growth rate of sukuk in terms of issuance volume has outstripped conventional bonds. Global sukuk registered a 5.2 per cent compound annual growth rate, compared to 2.3 per cent for conventional bonds. Annual growth rates alone do not convey the full story, though, as the conventional bond market towers over the sukuk market in volume terms.

The global bond market stood at $170 trillion at the end of last year, compared to $490 billion of global sukuk. A quick push of the calculator's buttons shows that the sukuk market is a paltry 0.3 per cent of the conventional bond market, although this is hardly an equitable comparison given the much longer history of conventional bonds and their universal appeal.

While bonds are accepted in every corner of the world, including in the core Islamic finance countries, sukuk remains heavily concentrated in Gulf Cooperation Council countries, Malaysia, Turkey and Indonesia. This brings a sense of reality that for all the much-touted phenomenal growth in Islamic finance, the sukuk market lags far behind conventional bonds, both in terms of issuance volumes and global acceptance.

The sukuk market represents roughly 20 percent of total Islamic finance assets of $2.4tn as of 2019. This is certainly a respectable achievement given that it stood at $25bn in 1995. However, after 25 years, Islamic banking assets continue to dominate the Islamic finance landscape, with a 72 percent share of the industry. Putting this into context, the global conventional bond market is already larger than the total global banking assets. Sukuk clearly has a very high mountain to climb to catch up and with rapid advancements in the technology and digital space, as well as in ESG investing there is a real danger the sukuk market could lose momentum and end up consigned to the margins of the financial markets.

The dual shock of lower oil prices and the economic crisis triggered by the Covid-19 pandemic has dampened sukuk issuance volumes so far this year. Core Islamic finance countries have either not tapped the sukuk market or opted for conventional bonds instead. GCC states have largely given sukuk a miss, with only Dubai and Bahrain issuing sukuk alongside bonds in dual tranche offerings. Between April and September, a total of $34bn in sovereign bonds were raised from the GCC. During the same period, only $2bn worth of sovereign sukuk were sold. Given the difference in these amounts, it is hard not to think of this as a lost opportunity for the sukuk market and the Islamic finance industry.

However, all is not lost as there have been positive developments in the form of the local currency sukuk and green sukuk issuance, as well as advancements in financial technology that could promote sukuk adoption.

Domestic sukuk issuance in Saudi Arabia increased by 45 percent year-on-year to 84 billion Saudi riyals ($22.4bn) in the first nine months of the year, according to Moody’s Investors Service. The government’s efforts to promote a more vibrant local currency sukuk market has yielded results. More efforts are needed to maintain and increase momentum but the Saudi domestic sukuk market seems to be heading in the right direction. The successful development of the domestic market in Saudi Arabia may also spur other GCC states to develop their own local currency sukuk markets.

Another bright spot in Islamic finance is the growth of green sukuk – Sharia-compliant instruments for financing environmentally sustainable projects such as the development of solar plants and other renewable energy schemes.

Green sukuk seems to be gaining traction in the GCC. In May last year, Majid Al Futtaim became the first corporate entity from the GCC to complete a benchmark green sukuk with a $600m ten-year fixed rate issuance and in November, the Islamic Development Bank raised €1bn ($1.19bn) through a five-year green sukuk. More recently, Saudi Electricity Company sold $650m of green sukuk to finance the company’s existing and future green projects.

Islamic FinTech, though still nascent, has the potential to boost Islamic finance growth. The UK currently has the most Sharia-compliant FinTech startups ahead of core Islamic finance countries such as Malaysia, the UAE and Indonesia. Looking further ahead, the growing Muslim population in Europe offers significant opportunities for Islamic challenger banks and FinTech startups. Islamic peer-to-peer (P2P) financing and crowdfunding platforms targeting small and medium-sized enterprises (SMEs) have also emerged in the UK.

In Indonesia, an Islamic microfinance cooperative recently transacted the first ever micro-sukuk through a public blockchain platform. The industry is also looking towards Islamic financial institutions to lead the way by incorporating ESG elements in their business practices with a view to attracting a wave of interest in more ethical investment from conventional customers.

Islamic finance players hope these developments will help the industry to gain the momentum needed to achieve the forecast of $3.8bn of total assets by 2022, as projected by Thomson Reuters.

Lim Say Cheong is chief executive of Lootah Global Capital, a member of The Gulf Bond and Sukuk Association

War and the virus
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.


- Abdullah Ishnaneh, Partner, BSA Law 

Company profile

Company: Verity

Date started: May 2021

Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif

Based: Dubai

Sector: FinTech

Size: four team members

Stage: Intially bootstrapped but recently closed its first pre-seed round of $800,000

Investors: Wamda, VentureSouq, Beyond Capital and regional angel investors

Manikarnika: The Queen of Jhansi

Director: Kangana Ranaut, Krish Jagarlamudi

Producer: Zee Studios, Kamal Jain

Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni

Rating: 2.5/5

2018 ICC World Twenty20 Asian Western Sub Regional Qualifier

Event info: The tournament in Kuwait is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.

Teams: UAE, Bahrain, Saudi Arabia, Kuwait, Maldives, Qatar

Friday fixtures: 9.30am (UAE time) - Kuwait v Maldives, Qatar v UAE; 3pm - Saudi Arabia v Bahrain

Company profile

Company name: Suraasa

Started: 2018

Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker

Based: India, UAE and the UK

Industry: EdTech

Initial investment: More than $200,000 in seed funding

La Mer lowdown

La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
 

MOUNTAINHEAD REVIEW

Starring: Ramy Youssef, Steve Carell, Jason Schwartzman

Director: Jesse Armstrong

Rating: 3.5/5

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

UAE currency: the story behind the money in your pockets
Everybody%20Loves%20Touda
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Nabil%20Ayouch%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Nisrin%20Erradi%2C%20Joud%20Chamihy%2C%20Jalila%20Talemsi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES

SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities

Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails

Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies

Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments

Fanney Khan

Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora

Director: Atul Manjrekar

Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand

Rating: 2/5 

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

Safety 'top priority' for rival hyperloop company

The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.

He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.

“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.

“Only once the system has been certified and approved will it move people,” he said.

HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon. 

With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.

In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

If you go

The flights

There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.

The trip

Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.

The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.

 

Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
In-demand jobs and monthly salaries
  • Technology expert in robotics and automation: Dh20,000 to Dh40,000 
  • Energy engineer: Dh25,000 to Dh30,000 
  • Production engineer: Dh30,000 to Dh40,000 
  • Data-driven supply chain management professional: Dh30,000 to Dh50,000 
  • HR leader: Dh40,000 to Dh60,000 
  • Engineering leader: Dh30,000 to Dh55,000 
  • Project manager: Dh55,000 to Dh65,000 
  • Senior reservoir engineer: Dh40,000 to Dh55,000 
  • Senior drilling engineer: Dh38,000 to Dh46,000 
  • Senior process engineer: Dh28,000 to Dh38,000 
  • Senior maintenance engineer: Dh22,000 to Dh34,000 
  • Field engineer: Dh6,500 to Dh7,500
  • Field supervisor: Dh9,000 to Dh12,000
  • Field operator: Dh5,000 to Dh7,000
'Munich: The Edge of War'

Director: Christian Schwochow

Starring: George MacKay, Jannis Niewohner, Jeremy Irons

Rating: 3/5

Brief scoreline:

Crystal Palace 2

Milivojevic 76' (pen), Van Aanholt 88'

Huddersfield Town 0

THE SPECS

      

 

Engine: 1.5-litre

 

Transmission: 6-speed automatic

 

Power: 110 horsepower 

 

Torque: 147Nm 

 

Price: From Dh59,700 

 

On sale: now