JEDDAH – Total sukuk issuance by end of 2012 reached $131 billion with 54 percent increase than 2011, where total sukuk issuance in December reached $8 billion with a 61 percent increase compared to last year, Kuwait Finance House-Research said Monday in its report. The report noted that Malaysia and the ringgit continue to dominate the market of sovereign sukuk issuance, where governmental and sovereign issuances were more by 70 percent in December ($5.7 billion). The top countries in sukuk issuance are as follows: Malaysia, Saudi Arabia, UAE, and Indonesia. One of the issuance was made by Saudi French Bank worth $506 million; in addition to the sukuk of FWU Group, which is the largest European issuance for Islamic sukuk at all for companies, and is the first sukuk issuance made by a German company for $55 million. Sukuk issuances continued at decent levels in December as we close off another tremendous year for the Islamic capital markets. A total of $8.1 billion was issued during the month, 61.7 percent higher than the same period of 2011. This means total issuances for 2012 round up to $131.2 billion representing a y-o-y increase of 54.2 percent. Malaysia dominated the month in terms of amount issued, accounting for a 90.2 percent market share, while there were a distinct absence of sukuk from Indonesia and the UAE. Malaysia was domicile to 74.0 percent of all primary market issuances in 2012, followed by Saudi Arabia (8.0 percent), the UAE (4.7 percent) and Indonesia (4.6 percent). Governments remained the largest issuer type, representing 70.1 percent during December while there were a number of significant issuances also issued in the financial services sector. Both sectors have represented 61.8 percent an11.4 percent of the primary market respectively in 2012 while the transport sector represents 13.0 percent. Notable issuances during the month include the SAR1.9 billion ($506.6 million) sukuk issued by Banque Saudi Fransi and structured using murabahah and mudharabah principles. The sukuk has a seven year tenure that pays 3 months SIBOR + 110bps on a quarterly basis. Similarly, FWU Group issued the first sukuk by a German corporate and the largest sukuk from a European corporate, worth $55.0m. Sovereign issuers made up 70.1 percent of the primary market in December while government related entities accounted for 6.8 percent and corporates took the remaining 23.2 percent. Malaysian ringgit accounted for 91.8 percent of issuances during the month as compared to 74.0 percent over the year. A total of 55 sukuk were issued in December versus 55 sukuk in November and 72 in October. Among these, 31 were issued by the corporate sector totaling $1.9 billion (November: $2.7 billion, -29.6 percent), 19 by sovereigns totaling $5.7 billion (November: $5.7 billion, +0.0 percent) and 5 by government related entities worth $548.8 million (November: $1.1 billion, -50.1 percent). — SG
