Finvizier  Consultancies DMCC releases research comparing sukuk and conventional bonds

Finvizier Consultancies DMCC releases research comparing sukuk and conventional bonds

Our Expertise

New Research - Dec 20, 2023

Today, Finvizier announced the release of a new research titled ‘Sukuk and Bonds: A Comparative Market Analysis.’ It contains a comparison between sukuk and bonds, pointing out these markets’ dynamics, geography, and functional aspects.

This research reflects Finvizier’s commitment to enforcing an understanding of financial tools to contribute positively to promoting sustainable development in emerging markets.  It offers a deep dive into comparing the sukuk and bonds market, unpacking several nuances related to sukuk.

Key takeaways: 

One key factor influencing the bond and sukuk markets is changes in the regulatory environment. Government policies, legislation, and regulatory measures can have a significant impact on these markets. For instance, changes in tax rates, rules, and regulations can affect the attractiveness and yield of bond and sukuk investments. Alterations in regulatory rules can also impact the availability and conditions of bond and sukuk issuances.

The digitization of the sukuk market has the potential to drive an expansion in volumes, offering expedited and cost-effective access to Islamic finance markets. By leveraging digital platforms and distributed ledger technology, digital sukuk streamline issuance, trading, and settlement processes, attracting a broader investor base and reducing administrative costs. This transformation enhances transparency, improves market liquidity, and revolutionizes the industry.

Another important factor is investment flows. External and internal factors can influence the inflow or outflow of capital into these markets. For example, changes in international economic conditions, political instability, or shifts in risk assessment can influence investors’ preferences and their decision to allocate funds to bonds and sukuk.

Macro-economic environment is another crucial aspect. Economic factors such as inflation, interest rates, unemployment rates, GDP growth, and currency stability can influence the bond and sukuk markets. Changes in the macro-economic situation can alter investors’ expectations regarding the yield and risks associated with these instruments.

Potential rise in interest rates and high inflation may impact the growth of the bond and sukuk markets. However, according to the S&P 500 Bond Index, there is an observed increase in bond issuance activity towards the end of this year, starting from November, of approximately 9%.

About Finvizier 

Finvizier is a licensed management consulting firm headquartered in Dubai, the UAE. The team consists of experienced professionals with diverse backgrounds across top global consulting firms, rating agencies, and investment banks. Through our services, we help our clients to achieve their financial sustainability goals while leaving a positive impact on the world.

Finvizier brings an individualized project-based approach as a fundamental feature of how it operates and how it can provide exceptional service to our clients.

Finvizier maintains strategic partnerships with relevant institutions and has a network of multi-disciplinary professionals so that the most relevant expertise supports each project.

For further details about our services or a brief overview, contact our business development team at info@finvizier.com.

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