1. Prospect andChallenges For Sukuk g ISMAIL E DADABHOY MUSCAT, MAY 2012

2. Sukuk and the Way Forward1. GLOBAL SUKUK MARKET STATS OVERVIEW & TRENDS2. WHERE TO EXPECT NEW GROWTH3. ADDRESSING SOME OF THE CHALLENGES4. IMPROVING COST & TIME EFFECTIVENESS

3. Global Sukuk Issuances (All Currencies) Jan 2001 1Q 2012 (Amounts in USD Millions)100,000.000 93,723 90,000.000 80,000.000 70,000.000 60,000.000 48,962 50,000.000 46,313 44,904 40,000.000 40 000 000 30,014 30,000.000 25,594 18,826 20,000.000 8,140 12,180 , 10,000.000 6,410 1,172 1,371 0.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q 2012 Year SOURCE:IIFMSUKUKISSUANCEDATABASE

4. Global Sukuk Issuances By Currency (Jan 2001 - 1Q 2012) Malaysian Ringgit Pakistani Rupees (PKR) (MYR) USD 5,181 Million USD 205,509 Million , 1.53% 60.87% Qatari Riyals (QAR) USD 9,548 Million 2.83% Saudi Riyals (SAR) USD 16,592 Million 4.91% 4 91% Sudanese Pounds (SDG) USD 13,214 Million 3.91%Kuwaiti Dinars (KWD) USD 329 Million Singapore Dollars (SGD) 0.10% USD 1,295 Million Jordanian Dinars (JOD) 0.38% USD 119 Million United States 0.04% Dollars (USD) Iranian Riyals (IRR) USD 58,775 Million USD 198 Million 17.41% 17 41% 0.06% Yemeni Riyals (YER)Indonesian Rupiah (IDR) Emirati Dirham (AED) USD 18.7 Million British Pounds (GBP) USD 8,185 Million USD 10,298 Million 0.01% USD 261 Million 2.42% 3.05% 0.08% Bahraini Dinars (BHD) Chinese Yuan Renminbi Bruneian Dollars (BND) USD 4,772 Million Gambian Dalasi (GMD) Euro EUR (CNY) USD 2 965 Million 2,965 1.41% USD 49 Million USD 221 Million USD 78 Million 0.88% 0.01% 0.07% 0.02% SOURCE:IIFMSUKUKISSUANCEDATABASE

5. Global Sukuk Issuances By Country (Jan 2001 - 1Q 2012) Malaysia PakistanUSD 213,250 Million USD 5,781 Million 63.16% 63 16% 1.71% 1 71% Qatar USD 11,783 Million 3.49% Saudi Arabia USD 24,532 Million 7.27% Kuwait Singapore USD 2,355 Million USD 192 Million 0.70% 0.06% Sudan Jordan USD 13,344 Million USD 119 Million UAE 3.95% 0.04% Turkey Japan USD 37,908 Million USD 450 MillionUSD 100 Million 11.23% 0.13% Iran 0.03% 0 03% USD 198 Million UK Yemen 0.06% USD 271 Million USD 18.7 Million Gambia 0.01% 0.08% Indonesia USA USD 49 Million USD 11,948 Million Germany USD 767 Million 0.01% Bahrain 3.54% USD 123 Million 0.23% Brunei DarussalamUSD 11,455 Million 0.04% USD 2,965 Million 3.39% 0.88% SOURCE:IIFMSUKUKISSUANCEDATABASE

6. Global Sukuk Issuances by Maturities (Jan 2001 - 1Q 2012) 2 to 5 years USD 105,289 Million 31.19% 1 Year or Less 6 to 10 yearsUSD 109,410 Million USD 66,382 Million 32.41% 19.66% 11 to 15 years y 41 to 50 years USD 20,415 Million USD 586 Million 6.05% 0.17% 16 to 20 years USD 17,505 Million 31 to 40 years 26 to 30 years 21 to 25 years 5.19% USD 5,822 Million USD 5,639 Million USD 6,560 Million 1.72% 1.94% 1 94% 1.67% 1 67% SOURCE:IIFMSUKUKISSUANCEDATABASE

7. Breakdown of Total Global Sukuk Issuance by Issuer Status Sovereign, Quasi Sovereign & Corporate Issues by Volume All Currencies (Jan 2001 Dec 2011) DomesticSukuk InternationalSukuk Corporate USD37,125 Sovereign Corporate MillionUSD103,241 USD108,322 65% Million Million 47% 50% Sovereign USD13,985 USD 13 985 Million Quasi Quasi 24% Sovereign Sovereign USD7,313 USD6,078 Million Million 3% 11% SOURCE:IIFMSUKUKISSUANCEDATABASE

8. Structural Breakdown of Domestic Sukuk Issuance (% by Volume)Sovereign, Quasi Sovereign & Corporate Issues All Currencies (Jan 2001 Dec 2011) Murabaha USD 83,456 Mudaraba d b 38% USD9,123 4% Istisnaa USD3,469 2% Musharaka Ijarah USD44,413 USD49,613 20% 23% Exchangeable Exchangeable Salam Salam USD408 USD1,683 0% 1% Investment/AlIstithmar USD8,978 Wakalah 4% USD2,125 , 1% BaiAlTawarruq Principle BaiBithaman Ajil Hybrid BaiAlInahPrinciple USD49 USD11,639 USD2,283 USD1,637 0% 5% 1% 1% SOURCE:IIFMSUKUKISSUANCEDATABASE

9. Structural Breakdown of International Sukuk Issuance (% by Volume) Sovereign, Quasi Sovereign & Corporate Issues All Currencies (Jan 2001 Dec 2011) Ijarah USD25,168 , 44% Exchangeable Mudaraba USD6,190 USD4,725 11% 8% Murabaha Hybrid USD1,243 USD2,854 2% 5% Musharaka USD9,364 16% AlWakalah Bel Wakalah Salam Istithmar , USD4,454 USD1,990 USD 1,990 USD1,201 8% 4% 2% SOURCE:IIFMSUKUKISSUANCEDATABASE

10. Where to expect New Growth New Entrants , Africa, Indonesia, Oman Saudi Africa Indonesia Oman, Soviet Block , North America and Australasia Takaful & Pension Investors Government Initiatives Local Currencies to Expand Yield Curve Reserve Benefit Collateralised Funding Repo Alternative Innovation & Expansion of Asset Type ( Local Currency Equity Linked Real Asset Backed Sukuk ) Linked,

11. Challenges Limited New Supply . Lack of Active Secondary Market Slow Fixed Income Mutual Funds Entrance Limited Private & Corporate F.I Investors Marketing to Retail Diversification Extra Steps and Approvals Processes Standardise Structure Template

12. Improve Cost & Time Effectiveness Standardise Proven & Acceptable Structures Standardise Documentation Need Approval from own Sharia Board? Empowering Traders / Investment Department from Management Committee

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