The CEO of CIMB Islamic believes that although sukuk issuance this year will not surpass last year's $16 billion, it will grow more rapidly next year as the impact of the credit crisis becomes less important.
The dollar-denominated Indonesian sovereign sukuk will be arranged by Barclay's Capital, HSBC and Standard Chartered and is expected to be issued in October or November and could be as large as $1 billion. The dollar-denominated sukuk will also be an ijara sukuk like the rupiah-denominated sukuk and will have maturities of between 7 and 10 years. A sukuk is also expected from Singaporean firm City Developments for up to S$1 billion ($709 million).
The 182-day maturity, BD5 million ($13.3 million) ijara sukuk from the Central Bank of Bahrain was oversubscribed by 100%.
Despite the rapid growth in sukuk in the UAE, the laws regarding default are not tested and are less favorable to creditors than other jurisdictions according to Standard & Poors.
GCC companies are leading the growth in Islamic finance with the large amount of capital in the region, particularly in Saudi Arabia, being invested in Shari'ah-compliant financial products like sukuk.