Standard & Poor's credit rating agency expected an increase in the volume of Islamic sukuk issuances during the current year to between 140 and 155 billion dollars, compared to 139.8 billion dollars in 2020 and 167.3 billion dollars in 2019. The agency attributed its prediction to good market conditions during the year 2021, in light of the record low interest rates and abundant liquidity.
The agency expects the GDP growth of the core countries of Islamic finance (the Gulf States, Malaysia, Indonesia, and Turkey) to recover from the sharp recession in the year 2020. It also expected the price of a barrel of oil to stabilize at $50 in the year 2021. According to the agency, these factors together support a stronger market performance of the global Sukuk market in 2021 compared to 2020.
The agency indicated that the risks of decline in the main countries of Islamic finance remain great. The main risk is whether the Covid-19 pandemic will be contained, even if vaccines are widely available by the middle of this year, and is what we would weigh according to our baseline scenario. Revealing that until then, the main risk is the possibility that new waves of infection and measures to contain them may harm the fragile economic recovery of countries, which may affect countries directly or indirectly through lower commodity prices and a decline in exports and capital flows. It also believes that some sovereign governments of the major countries in Islamic finance will move more towards the Sukuk market this year.
Source (Al-Arabiya.net website, Edited)