SUKUK : ANALYZING THE

PERFORMANCE ON THE
GLOBAL MARKET
CONTENTS
 Introduction - Abstract
 Problem Statement

 Objective

 Methodology

 Data and Findings

 Conclusion and Summary

INTRODUCTION
 Abstract
 The emerging market of Islamic-based instrument due to the
flaws of conventional financial instrument which heavily rely
on interest (riba’)
 Profit sharing method or asset backed security
 Recent collapsed of conventional-based banking such as
house mortgage and debt selling
PROBLEM STATEMENT
“ The performance of Islamic-based money market instrument
on the global financial market”

How does the islamic-based instrument fair in the global

market?
Is the recent burst of islamic-based instrument introduced in the
market is only a hype?
How can we compare their performance against other
established money market instrument?
OBJECTIVE
 2 main objective
 To look at the performance of Sukuk index against other
bond index available in the market
 To analyze the performance of each components in the index
METHODOLOGIES
 Data gathering from published source – Bloomberg. This
is considered secondary data since its published publicly
and the analysis is done by compiling the data.
 Measuring the performances of by the bond rating

 Measuring the performance of each components against

one another
 Grouping the components per country of investment

 Sukuk used : The Dow Jones Citigroup Sukuk Idx

DATA AND FINDINGS
 Graphical Data
DATA AND FINDINGS - CONT
DATA AND FINDINGS - CONT
DATA AND FINDINGS - CONT
 Tabular

Market Value ($ Effective Duration to

Name Number of Bonds Average Coupon Average Life (yrs) Quality Yield-to- Maturity Spread to LIBOR
Millions) LIBOR

Sukuk Index 15 10,496.65 3.62 3.72 A+ 3.46 3.09 185

AAA 2 1,392.69 2.65 4.12 AAA 1.94 3.92 16

AA 2 1,562.76 4.59 3.84 AA 3.62 3.52 198

A 8 6,346.40 4.18 3.85 A- 3.43 3.35 179

BBB 3 1,194.80 0.75 2.52 BBB 5.15 0.18 398

1-3 Yr. 4 1,580.21 0.82 1.54 BBB+ 4.79 0.18 406

3-5 Yr. 10 8,625.00 4.28 4.06 A+ 3.21 3.72 148

5-7 Yr. 1 291.44 0.78 6.32 BBB+ 3.56 0.23 86

DATA AND FINDINGS - CONT
 Tabular II
Name Index Value 1-Month 3-Month 6-Month YTD 12-Month

Sukuk Index 125.66 -0.41 0.83 4.47 9.4 9.4

AAA 127.72 0.13 1.56 6.68 9.74 9.74

AA 120.38 -0.02 1.6 4.79 12.58 12.58

A 120.46 -0.82 0.23 4.03 9.24 9.24

BBB 87.51 0.72 2.21 4.77 7.02 7.02

1-3 Yr. 136.25 1.02 2.11 4.98 7.67 7.67

3-5 Yr. 112.6 -0.82 0.43 4.46 10.77 10.77

5-7 Yr. 101.08 -0.55 0.33 1.67 1.08 1.08

 DATA AND FINDINGS - CONT
 Tabular III
Name Coupon Maturity PAR ($MM) Quality Country Stated Coupon
Dubai Islamic Bank
0.62 3/22/2012 657.5 BBB- UAE Floating-rate
Sukuk
Emirates Islamic Bank 0.602 6/12/2012 350 A- UAE Floating-rate

QREIC Sukuk LLC 1.016 8/2/2012 300 BBB+ Qatar Floating-rate

CBB International
1.224 3/18/2013 350 A Bahrain Floating-rate
Sukuk Company
CBB International
6.247 6/17/2014 750 A Bahrain Fixed-rate
Sukuk Company
Rak Capital 8 7/22/2014 400 A UAE Fixed-rate
Petronas Globak Sukuk
4.25 8/12/2014 1500 A- Malaysia Fixed-rate
Ltd
IDB Trust Services Ltd 3.172 9/16/2014 850 AAA Supranational Fixed-rate

TDIC Sukuk Ltd 4.949 10/21/2014 1000 AA UAE Fixed-rate

GE Capital Sukuk Ltd 3.875 11/26/2014 500 AA+ United States Fixed-rate

Malaysia Sukuk Global 3.928 6/4/2015 1250 A- Malaysia Fixed-rate

QIB Sukuk Funding Ltd 3.856 10/7/2015 750 A Qatar Fixed-rate

IDB Trust Services Ltd 1.775 10/27/2015 500 AAA Supranational Fixed-rate

ADIB Sukuk Co Ltd 3.745 11/4/2015 750 A UAE Fixed-rate

MBB Sukuk Malayan 0.783 4/25/2017 300 BBB+ Malaysia Floating-rate

DATA AND FINDINGS - CONT
 Derived Graph
 YTM
 Spread to LiBOR
DATA AND FINDINGS - CONT
 Par Value
SUMMARY
 Based on the comparison on the Bloomberg chart, the
Sukuk Index is showing a significant growth for the past
5 years.
 Conventional corporate bond is slightly weak compared
to Sukuk Index.
 Comparing those index, assumption can be made that the
Sukuk is performing well better then the other corporate
bond.
 In the derive graph, the statistic shows that they are
about 15 sukuk are being traded in the market
 However, some of it is quite risky by having a wider
spread to LiBOR.
CONCLUSION
 The performance of Sukuk index is clearly better than
the other corporate bond showing that the recent burst of
Islamic money market instrument is not a hype but a
proven product.
 The performance of each component is also showing
some good numbers although some of it might have a
bigger spread to LiBOR as a sign to the banking system
health where the Sukuk is traded.
INTERESTING LINKS
 http://www.djindexes.com/
 http://www.bloomberg.com

 http://dowjones.investiq.com/dowjones/isec_global.html

 http://www.sukuk.me/