14 Times Growth of Sukuk Issuance in Iran’s Capital Market

Sukuk issuances rose to 83.662 bln Rial in 1395 (March 2016- March 2017), from 290 bln Rial recorded during 1394 (March 2015-2016)

Dr. Mohammad Reza Mohseni, CSDI’s CEO and president stated; the size of Sukuk market in Iran’s capital market has grown considerably in the last year. After the nuclear deal in January 2016 between Iran and the six powers of the world, demand for Sukuk issuance, as a Sharia-compliant debt-instrument has been increased. Iranian private and governmental entities taking into account Sukuk as one of the main finance resources for their development plans.

As well as rising demand, the growth of Sukuk has been aided in recent years by improving regulatory environment and easing issuance process. To enhance Iran’s capital market role in the economic growth of the country, Ministry of Finance and Economic Affairs along with the Central Securities Depository of Iran and Iran Farabourse, formed a committee to recognize and remove the limitations and barriers to expand the Sukuk market in Iran.

Three ministries, one state-owned entity and ten private companies benefited from Sukuk issuance in 1395. Saipa, Bana Gostar Karane, Siman Shargh, Joopar,Rightel, Mahan, Isfahan’s Mobarake Steel Co., Bank Maskan, Parsian Lotus Investment Bank,Governemnt Trading Corporation of Iran,  Ministry of Finance and Economic Affairs, Ministry of Labor and Social Affairs, Ministry of Science issued Sukuk last year.

CSDI’s CEO added; the rising trend of Sukuk issuance is expected to continue over the upcoming years. Central Securities Depository of Iran’s role is essential in expanding the Sukuk market in Iran. CSDI is responsible to pay all the Sukuk proceeds. In addition, CSDI is the main shareholder of the Central Capital Market Asset Manager which is in charge of logistical and administrative affairs of SPVs as the Sukuk issuers.

Release Date: 4/15/2017

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