Dubai Islamic Financial Centre (DIFC) recorded a 45 percent growth in Islamic assets being managed by it. DIFC’s record growth of Islamic assets is between the second quarter of 2018 to the second quarter of 2019. In a press release, DIFC said that Islamic finance sector is growing at a rate of 1.5 times the traditional finance sector.
Markets such as the Middle East, Africa and South Asia continue to reflect steady growth. This is primarily driven by large sukuk issuances and$1 trillion worth of financial assets across GCC countries.
International sukuk issuances from major markets remained unchanged in the first nine months of 2019. According to ratings agency Fitch, sukuk issuances with maturity of more than 18 months from the GCC region, Malaysia, Indonesia, Turkey and Pakistan reached $30.6 billion during that period, compared to $31 billion in the same period last year.
Dubai is one of the world’s largest centres for sukuk listings by value at $62 billion. The media reported that DIFC is a catalyst for the sector’s growth.
Fitch in its report said, “Beyond the GCC, Malaysia has remained the key source of sukuk supply in 2019. Increased volumes have been driven by Bank Negara Malaysia providing more short-term Islamic Treasury Bills to aid liquidity management at Islamic financial institutions, and also by a surge in local-currency corporate issuance.”
It appears that macroeconomic and geopolitical factors might impact sukuk issuance. However, new issuances in the future will be supported by refinancing activity. Fitch said that GCC debt markets are still developing.