Sukuk 2014 in Review

The Dow Jones Sukuk Total Return Index (Ex- Reinvestment) delivered a total return of 6.37% in 2014, which outperformed its 0.23% gain in the prior year; see Exhibit 1 for the index performance.

Exhibit 1: Total Return Performance of the Dow Jones Sukuk Total Return Index (Ex-Reinvestment)

Source: S&P Dow Jones Indices. Data as of December 31, 2014.  Charts are provided for illustrative purposes.

Source: S&P Dow Jones Indices. Data as of December 31, 2014. Charts are provided for illustrative purposes.

With the continued growth in the sukuk market, the total market value tracked by the index rose 32% to USD 48 billion, as of December 31, 2014.  Comparing the new issues in 2013 and 2014, both the count and the size grew; the average sukuk deal size reached 880k, see Exhibit 2 for the comparison.

Exhibit 2: New Issues Comparison

2013

2014

Total  Count

13

16

Total Par Amount

   10,800,000,000

          14,100,000,000

Total Market Value

   10,714,815,969

          14,655,559,089

Average Deal Size

830,769,231

                881,250,000

Source: S&P Dow Jones Indices. Data as of December 31, 2014.  Charts are provided for illustrative purposes.

Looking at the new issues in 2014, the biggest sukuk issuer was IDB Trust, totaling 3 billion, followed by Saudi Electric, totaling 2.5 billion.  There were new entrants in the sovereign sukuk space, such as South Africa (issued 500mio) and Hong Kong (issued 1 billion), and the returning issuer Indonesia (issued 1.5 billion).

The posts on this blog are opinions, not advice. Please read our disclaimers.

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