Sukuk Instruments Moving to Different Parts of Balance Sheet

In a recent interview, Mohieddine Kronfol, CIO for Franklin Templeton Global Sukuk and MENA Fixed Income Strategies highlighted the changing nature of the sukuk market, stating “The Sukuk market continues to be characterized by a lot of innovation and a lot of growth.”

Speaking with Franklin Resources TV, he highlighted examples of new innovative structures which expose different parts of balance sheet to capital raising citing examples of subordinated, perpetual, and equity type sukuk issuances.

Sukuk Represent an Attractive Diversifier to Client Portfolio’s

The continued interest of new entrants in the shape of sovereigns looking to issue debut sukuk will continue to create demand on the issuer side. On the investor side sukuk represent an attractive diversifier to client portfolio’s, a position which he expected to persist, adding sukuk are attractive because they offer low correlation to other asset classes, low volatility as well as attractive returns.