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An In-Depth Look at the Dow Jones Sukuk Indices Better understand the growing Sukuk market.

The issuance in the U.S. dollar-denominated sukuk market [as tracked by the Dow Jones Sukuk Total Return Index (ex-Reinvestment)] continued to be robust in 2017. Sukuk issuance in 2017 has already outgrown the strong growth seen in 2016. The total issuance through September 2017 was USD 20.25 billion, representing a 20% increase from the year before. In fact, sukuk issuance has continued to record double-digit growth since the slump in 2015. In 2017 YTD, 1 we have seen the highest issuance since 2012.

As tracked by the index, the Gulf Cooperation Council (GCC) countries continued to be the most active issuers of U.S. dollar-denominated sukuk and contributed over 80% of the new issuances. Saudi Arabia debuted its first U.S. dollar-denominated sukuk and attracted strong market participants demand; it raised USD 9 billion in sukuk, equally split into 5- and 10-year tranches. Other returning issuers like Indonesia and Oman raised USD 3 billion and USD 2 billion, respectively. Hong Kong also came back to the market and launched a 10-year sukuk, which extended the yield curve from its two previous five-year sukuk.

Looking at overall country exposure in the Dow Jones Sukuk Total Return Index (ex-Reinvestment), the GCC currently represents 65%, and among the GCC, Saudi Arabia has the largest exposure, at 34%, followed by United Arab Emirates, at 20%. Sukuk issued from Malaysia and Indonesia constitute around 10% and 17%, respectively.

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