THOMSON REUTERS

SUKUK PERECPTIONS & FORECAST 2015

Growing the Global Footprint of Sukuk Tapping New Sovereign & Corporate Opportunities

In The Islamic Capital Markets

MARKET OVERVIEW

What has been happening in the global Market up to Q3, 2014?

$0.72 $1.02 $0.21 $0.97 $2.57 $3.33 $5.36 $4.98

$11.27

$20.43

$37.63

$20.99

$34.30

$51.24

$84.40

$137.14

$116.93

$99.27

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1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD Q3,

2014

Number of Sukuk $ Billion

Global Aggregate Sukuk Historical Trend (1996-Q3 2014)

Amount Sukuk Issued Number of Sukuk

2014 Global Sukuk Market bounces back from 2013 low with almost $100

billion sukuk issued in the first nine months

2014, market mix is expanding to include more non-OIC countries from

both Sovereigns and Corporates

19 jurisdictions tapped the sukuk market in 2014 with UK, Hong Kong,

Luxembourg, Senegal and South Africa newcomers…

The Malaysian Ringgit continues to dominate the sukuk market with GCC

currencies rising and European currencies entering the market

Up to Q3, 2014, total sovereign sukuk issuance was $63.05 billion compared

to $13.61 billion quasi-sovereign and $22.60 billion corporate issues…

Financial institutions continued to lead all corporate issuances, followed by

power and utilities, construction, real estate & transport …

Of the 224 murabahah issuances, only 2 were issued outside Malaysia….

On the other hand, the market is moving cautiously in terms of adopting

new structures…

Based on survey findings investors & lead arrangers are moving towards

mid-term sukuk..which may affect the demand for longer term sukuk

MARKET OUTLOOK

Supply & Demand Model Assumptions

7%

19%

22%

25%

27%

0% 5% 10% 15% 20% 25% 30%

Rare Paper/issuer

Reasonable credit risk

Mandate to only invest in Islamic instruments

Diversification

Attractive Yield

What are your reasons for investing in sukuk?

BUY SIDE

3%

8%

20%

33%

38%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Restructure debt

Cheaper funding and better

pricing

Refinance debt

Diversify source of funding

Business Expansion

What is your primary reason to issue sukuk?

SELL SIDE

On the supply side, conventional issuers are attracted by the high demand for

sukuk while higher yield attracts non-Shariah-sensitive investors

Expectation for full year 2014 can be attributed to the strong pipeline for

Q3/Q4 2014 and early 2015 from both sovereigns and blue chip corporates.

2014

2015

On the demand side, according to IFDI 2014, total global Islamic Finance

assets in 2013 reached $1.658 trillion covering a universe of 92 countries

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Sukuk Demand & Supply Levels (2014 – 2020)

Total Global Sukuk Matured Total Global Sukuk Issued Total Outstanding Global Sukuk (Previous Year)

Total Outstanding Global Sukuk Total Sukuk Demand

Supply & Demand Gap: Despite the postive come back for

sukuk in 2014 it is still below 2012 levels. Supply & Demand

Gap has increased to reach $236 in 2014 due to lower

expected issuance driven by economies recovery , higher

interest rates and feds bonds repurchase However, it is

expected to drop in 2018 onwards due to steady market

issuance

2020: Easy road for sukuk with issuance surpassing $200 billion and demand

reaching almost a trillion

Thank you

Any Questions