Turkey ambitiously aims to win a bigger slice of the global sukuk market, steadily building its own book of sovereign, corporate and financial institutions issuances.
Sukuk have emerged as one of the most significant financing tools in Islamic finance. These securities form a bridge between issuers—primarily sovereigns and corporations—and investors located in the Middle East and Southeast Asia.
Sukuk, the Islamic alternative to conventional bonds, is rapidly and steadily gaining ground in Turkey.
Turkey's government is determined to make Istanbul a financial hub for Islamic finance, regionally and globally. With a GDP of US$733.6 billion in 2015 according to the IMF, Turkey is the 18th largest economy in the world, and is well placed to become one of the major players in the global sukuk market.
Bolstered by its recent tax and legal reforms, Turkey is expected to reinforce its role as one of the prominent global sukuk players. Supported and incentivized by such reforms, pioneers in the Turkish corporate sukuk market will benefit from the "first-mover advantage" but will also face a number of challenges unique to "first movers".
Distress is rippling through the system, following low commodity prices, general credit market weakness and ongoing uncertainty around the pace of global economic recovery.