According to the public relations of the Capital Market Central Asset Management Company, Fitch Ratings Institute’s report indicates that the volume of Sukuk issuance will grow in 2022 and this instrument will be used as one of the key sources of financing in the Islamic financial markets.
Referring to the risks and opportunities that Sukuk market will face in 2022, Fitch declared the items such as Muslim investors’ enthusiasm for these instruments, diversification of financial resources and Islamic financial development programs in some countries can help sustain Sukuk growth. On the other hand, risks such as rising oil prices, the complexities of complying with the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) standards, rising interest rates, declining global investors’ eagerness for debt securities in emerging markets and political risks can threaten this market.
In 2021, the total volume of sukuk issued worldwide increased by 36.1% year-on-year to $ 252.3 billion, while the market faced challenges such as high oil prices, the Corona pandemic and the complexity of complying with the standards of AAOIFI . Most of these bonds were issued by central banks, governments and multilateral institutions and 80% of them were issued domestically.
The role of some countries in issuing sukuk in 2021 was remarkable such as Malaysia, Indonesia, GCC countries, Turkey and Pakistan, which issued a total of $ 230.2 billion sukuk. Also, other countries such as the United Kingdom, Nigeria, the Maldives etc. financed through sukuk over the past year.
Global Sukuk reserves reached $ 711.3 billion at the end of 2021, which is 12.7% more than 2020. Issuance of green and sustainable Sukuk stood at $ 15 billion with an annual growth of 17.2% and this trend is likely to continue in 2022. A number of Sukuk issuers defaulted in 2021, including Serba Dinamik Holdings Berhad and Garuda Indonesia Airlines.
Over the past year, some terms and conditions of Sukuk documents were issued. At present, they are being issued to comply with AAOIFI standards.