Moody's, the credit rating agency, suggested that the growth of Islamic banks' assets will continue to outperform conventional banks, although the continued rise in oil prices will reduce the requirements for issuing sukuk. According to the agency, Islamic finance markets will continue to grow in 2022 with the acceleration of the economic recovery, which will boost credit growth and demand.
Moody's indicated that the economic recovery will strongly support the main Islamic finance markets, especially in the UAE. But at the same time, the agency expects that the rise in oil prices will lead to a decrease in sukuk issuances in 2022, driven largely by a decrease in financing for projects, especially in the Gulf countries.
Sukuk issuance fell 12% to $181 billion last year, amid declining sovereign financing needs in the Gulf states and Indonesia in light of high oil prices and economic recovery. The agency expects a further decline in issuance activity in 2022 to reach between $160 billion and $170 billion.
In 2020, assets under management in Islamic funds rose to a new record high of $140 billion, an increase of 31.9 percent year-on-year.
The source (Al-Arab London Newspaper, Edited)
