Moody's, the credit rating agency, expected the Islamic sukuk global issuance to drop to between $190 and $200 billion during 2021, slightly less than last year, which recorded $205 billion.
The decline in Islamic sukuk issuances, according to Moody's, is due to the rise in oil prices, which led to the shrinking of sovereign financing needs in the Gulf countries. Indicating that the improving economic conditions and high financing needs will support the issuance activity in Southeast Asia, and Malaysia will continue to dominate global sukuk issuances with activity denominated mainly in the local currency.
Moody's expects the sukuk market to maintain its long growth trend supported by new entrants, low penetration rate, and innovative new Islamic products, such as green and sustainable sukuk. Noting that the economies that issue sukuks globally were affected during the past year by the Corona pandemic and the decline in oil prices, which increased the public budget commitments and prompted them to issue sukuk to provide the necessary financing.
Source (Anadolu Agency, Edited)
