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null EPICENTRE February 2023: Malaysia continues to lead the global sukuk market


EPICENTRE February 2023: Malaysia continues to lead the global sukuk market
Malaysia continues to lead the global sukuk market
Outstanding global sukuk as at end 2022 maintained double digit growth (+11.2%) to USD751.6 billion, despite lower issuances during the year amid global tightening of monetary policy. Overall, the global sukuk issuance in 2022 is led by sovereign and quasi-sovereign issuers. Malaysia continues to spearhead the international sukuk market, commanding 40.3% market share of global sukuk outstanding and 43.3% share of global sukuk issued in 2022. Majority of global corporate sukuk were also issued in Malaysia.

Download the infographic below for more information on the global sukuk performance in 2022.

In another development, Malaysia's Islamic financing growth in 2022 propelled to a five-year high of 13% while takaful industry recorded a compound annual growth rate (CAGR) of 20.6% (for the first nine month of 2022). 

The MIFC Team
Download Infographic
Banking developments

Malaysia's Islamic financing growth is likely to moderate in 2023

Due to the country’s supportive regulatory environment and Islamic finance ecosystem as well as the shift towards Sharia-compliant services, Malaysia's Islamic financing growth is expected to continue despite the likelihood to moderate in 2023. In 2022, a strong economic rebound has propelled Islamic financing growth to a five-year high of 13%.
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Regulatory updates

Bursa Malaysia enhanced framework to buy & sell Islamic securities

Bursa Malaysia enhanced its Islamic Securities Selling and Buying – Negotiated Transaction (ISSBNT) Framework includes an “Additional Remedial Option” which allows users to recall or acquire back the securities if the status of the ISSBNT Eligible Securities changes to Shariah non-compliant, while the previous framework only allowed transactions to be cash settled via commodity murabahah or replacement with similar Shariah-compliant securities as remedial options.
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Discussion Paper on Financial Inclusion Framework 2023-2026

BNM invites written feedback on this discussion paper of the Framework which will serve as a four-year strategic roadmap and principle-based guidance to advance financial inclusion.
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Global sukuk issuance likely to rise at slow pace in 2023 amid volatilities

According to Fitch Ratings, Global sukuk issuance are likely to rise at a slow pace in 2023 amid market volatilities and remain a key funding source in core Islamic finance markets. Sukuk issuance from the core markets (including multilaterals) in 2022 fell 7.9% to USD244.3 billion versus a year ago but outpaced bond issuance in core markets, which fell 22.1% in the same period.
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Malaysia’s takaful industry recorded CAGR of 20.6%

Malaysia's takaful industry recorded a compound annual growth rate (CAGR) of 20.6% in the first nine months of 2022 (9M22) due to the growing demand for pure Islamic products. The growing demand for digital services is also expected to be a catalyst for takaful growth in Malaysia.
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MTA expects DITOs to boost takaful penetration rate to 30 pct by 2027

The Malaysian Takaful Association (MTA) signed a Memorandum of Agreement (MOA) with the Iranian Insurance Research Centre (IRC) to collaborate on knowledge-based takaful enrichment programmes.
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Malaysia and Iran to boost their respective takaful industry

The Malaysian Takaful Association (MTA) expects the digital insurers and takaful operators (DITO) to boost the country’s takaful penetration rate to 30% by 2027 from 18.6%in 2021 to eventually achieve the overall target rate of 75% set by the government.
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Malaysia, Indonesia to ink halal industry pact in June

Malaysia and Indonesia are expected to sign a memorandum of cooperation (MOC) in June to encourage halal sector trade between the two nation
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