A report issued by Moody's credit rating agency showed that governments in the Gulf states are increasingly continuing to shift towards Sukuk issuances due to higher financing needs due to moderate oil prices and broad financial deficits.
According to the agency, corporate issuances will remain limited, due to the presence of more attractive opportunities in the traditional debt market, while financial institutions will boost their Sukuk issuance.
Moody's report shows that the Islamic banking, Sukuk and Takaful sector will benefit from supportive government policies in many countries, in addition to the strong demand for products that comply with Islamic law, despite the challenges of the epidemic. Islamic finance is expected to continue to rise during the current year and beyond, maintaining its long-term growth. It also disclosed that this industry, in general, is still not sufficiently represented in countries where Muslims are present in a large number, which opens the way for further expansion.
Moody's forecast reveals that global Sukuk issuances will remain stable in 2021, reaching between 190 and 200 billion dollars, after the record issuances recorded by this sector by 205 billion dollars in 2020.
According to Moody's, the penetration of this industry in the main Islamic finance markets in the Gulf region, Malaysia, Indonesia and Turkey increased by 32.8 percent last September, compared to 31.4 percent in 2019 and 25.5 percent in 2013.
Source (Al-Rai Newspaper-Kuwait, Edited)
