IsDB Dedicated to Advancing Sukuk Market Growth
During a webinar organized by the Islamic Development Bank IsDB Treasury Department on the “Sukuk Market Outlook and Investor Appetite,” Dr. Zamir Iqbal, the Vice President (Finance) and CFO of the Islamic Development Bank expressed the Bank's commitment to providing more depth to the Sukuk market.
He mentioned that the Bank will issue AAA-rated benchmark size Sukuk every year to help investors achieve their objective of promoting economic development in the Bank's member countries.
The webinar included a panel discussion by senior market experts, sharing insights on the current state of the nearly US$ 900 billion Sukuk market, recent trends and developments, and discussing the factors that are likely to shape its future growth.
The webinar attracted a diverse audience of professionals, investors, bankers, and analysts from around the world. It is part of a six-session webinar series leading up to the 2023 IsDB Group Annual Meetings under the patronage of The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, which will take place in Jeddah, Kingdom of Saudi Arabia, from May 10–13, 2023.
Dr. Zamir highlighted that the Bank has issued over 60 Sukuk issuances in the global capital markets, worth almost US$42 billion to date, with roughly US$22 billion currently outstanding. He also mentioned that IsDB has created its Sustainable Finance Framework in 2019 in line with the global Green Bond Principles, the Social Bond Principles, and the Sustainability Bond Guidelines that were published by the International Capital Market Association (ICMA).
Under the Framework, IsDB has issued more than US$5 billion of Green Sukuk and Sustainability Sukuk issuances, mobilising resources for positive climate action and improving social development in its member countries.
Dr. Zamir further added that the Realigned Strategy of the Bank will cater to the increasing demand for financing green infrastructure, interventions for poverty alleviation, and building resilience. This will result in a strong pipeline of eligible projects that can then be used as the underlying pool of assets for more Green and Sustainability Sukuk issuances in the near future.
The Keynote Address was followed by an expert panel composed of Mr. Aissani Abdelouahab, Deputy Director at the Central Bank of Algeria, Dr. Mohamed Damak, Senior Director of Financial Institutions Ratings at Standard and Poor’s (S&P), and Mr. Karim Elzein, the Head of Middle East, Türkiye, and Africa (META) Debt Capital Markets at Société Générale. The panel was moderated by Mr. Mohammed Sharaf, Director of the Treasury Department of IsDB.
Mr. Aissani shared the investor's perspective on the discussion and mentioned how Sukuk issuances have brought about more portfolio diversification opportunities in the fixed-income space. Dr. Mohamed highlighted the major trends in global Sukuk issuances in the past couple of years and outlined the challenges that need to be tackled for future growth, especially in a volatile market backdrop, interest rate actions, and efforts towards digitalisation around the world.
Mr. Karim shared the general investor sentiment in the Sukuk market from the traditional captive Sukuk investors as well as non-traditional conventional investors who have become very active in emerging markets. He also highlighted that currently, the demand outstrips the supply of Sukuk, and therefore, the growth potential is massive when considering that all types of issuers (sovereigns, FIs, etc.) are accelerating efforts towards individual, national, and regional green/net-zero plans.
The webinar concluded with an interactive Q&A session. Overall, the webinar provided valuable insights into the current state and future prospects of the Sukuk market and highlighted the growing interest in Islamic finance among investors and stakeholders.
The recording of the webinar is available here.
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Source: IsDB
