Total global outstanding sukuk reached $715.2 billion in the first quarter of the year -- 3% higher than the last quarter of 2020, according to international credit rating agency Fitch Ratings said late on Wednesday.

A sukuk is an Islamic financial certificate, similar to a bond in Western finance, which complies with Islamic religious law, also known as Sharia.

Fitch noted that the momentum in sukuk issuance is expected to continue through the rest of the year.

In the report, it was stated that the sukuk market is affected by emerging markets and global trends, including the impact of rising US bond yields on fixed income markets.

"Sukuk issuance with a maturity of more than 18 months from the Gulf Cooperation Council (GCC) region, Malaysia, Indonesia, Turkey and Pakistan was $9.9 billion in the first quarter of 2021, similar to the last quarter of last year," the credit rating agency noted.

The volume of Fitch-rated sukuk reached $119.1 billion at the end of this year's first quarter. About 30.5% of this is projected to mature in 2021-2023, it added.

Islamic banking assets in Turkey

Meanwhile, Islamic banking assets in Turkey are expected to double within a decade as government initiatives drive growth in the sector, according to a report published credit rating agency Moody’s in January.

Noting that the Turkish government founded three new state-owned Islamic banks from 2015 to 2019, the report said the country would continue to broaden access and increase competition.

It added that a state-funded $2.6 billion International Financial Centre in Istanbul (IIFC) is scheduled to open in 2023, which will be "a new catalyst for growth."

"Borsa Istanbul, launched trading in sukuk (Islamic bonds) in August 2018, deepening the country's Islamic capital market activities," it underlined./aa