Emirates NBD, a leading bank in the region, today announced the launch of the Emirates NBD Markit iBoxx USD Sukuk Index, covering global USD denominated sukuk (Islamic bonds).

The index will contain 98 sukuk from 61 issuers with a current market value of over $90 billion.   

The Emirates NBD Markit iBoxx USD Sukuk index captures sovereign, sub-sovereign and corporate sukuk from emerging and developed markets and will contain investment grade, sub investment grade and unrated securities which offer a broad representation of the global sukuk universe. Combining transparency, multi-dimensional analysis, independence and flexibility, the index will provide an accurate and objective benchmark for Islamic finance investors, said a statement.   
 
Developed by Emirates NBD Group in collaboration with IHS Markit, a world leader in the provision of fixed income and macroeconomic indices, the index is a market-cap weighted index dedicated to capturing the performance of the sukuk market. It will be used for benchmarking, risk and performance analysis and as an underlying for tradable products. In order to meet the growing demand for shari’a-compliant solutions, it is envisaged that the index will be utilised by a range of institutions including asset managers, banks, pensions and sovereign wealth funds and ETF issuers, it said.

Ahmed Al Qassim, chief executive officer of Emirates NBD Capital, said: “Demand for sovereign and corporate sukuk has increased significantly over the last few years attracting significant international capital. With the launch of the Emirates NBD Markit iBoxx USD Sukuk Index, we aim to provide investors with world-class analysis tools and standardised performance measurement to enable them to make the best investment choices. The index will also enable the creation of products that will pave the way for greater access to the sukuk market for retail investors who have historically been underserved by opportunities to invest in this asset class. Synergising the bank’s long-standing expertise in Islamic capital markets with IHS Markit’s globally trusted expertise in creating and providing indices, the index will be a catalyst for advancing the global Islamic finance economy.”

Tariq Bin Hendi, executive vice president and head of products and advisory, Emirates NBD, said: “With a strong level of 2017 sukuk issuance from both sovereigns and corporates, led by Saudi Arabia, and a promising pipeline for the rest of the year, the Emirates NBD Markit iBoxx USD Sukuk Index will be a valuable tool for fund managers both within the GCC and further afield. From an asset management perspective, we look forward to the product development opportunities the index can provide, creating new avenues for regional and global investors to access the investment opportunities provided by Sukuk. We have worked closely with Emirates NBD Capital and the group’s research department to develop the index, and look forward to our continued partnership on this project.”

Tim Fox, chief economist and head of research at Emirates NBD, said: “The Index would provide an additional avenue for accurate assessment of the overall development and performance of Islamic debt capital markets in the region. While there is a plethora of indices available for conventional bonds, reliable and easily available sukuk indices are few and far between. As a leading provider of research in the region, Emirates NBD is committed to providing detail and regular information on the sukuk universe to our ever demanding investor base.

“The creation of the Emirates NBD Markit iBoxx USD Sukuk index is an important and timely expansion of our global iBoxx family of bond indices,” said Aram Flores, managing director and co-head of Indices at IHS Markit.  “In partnering with Emirates NBD, we are able to leverage relevant market expertise and offer a dedicated index representing the dollar denominated sukuk market.  With growing interest in sukuk, we are confident that the Emirates NBD Markit iBoxx Sukuk Index as a new, independent benchmark will help a diverse group of investors access this dynamic market.”

End of day index values are available on https://www.markit.com/product/IBoxx - TradeArabia News Service