Moody’s forecasts steady sukuk issuance for rest of 2018

Rating agency Moody’s expects global sukuk issuance to reach $90-$100 billion by the end of 2018, keeping it in line with 2017 levels.

“Over the long term, we expect sukuk issuance volumes to continue to grow as governments across the core Islamic finance markets shift their financing mix towards a combination of conventional and Islamic instruments,” said Nitish Bhojnagarwala, a Vice President and Senior Credit Officer at Moody’s.

Its forecast of steady issuance comes despite a 12% decrease in the first half of 2018 to $55 billion, which it puts down to lower issuance volumes in the GCC region.

However Moody’s states that the July 2018 launch of a primary dealers’ scheme for government bonds issued on the Saudi stock exchange (Tadawul) may help to boost volumes.

The rating agency’s report also states that the issuance of the world’s first green sukuks in Malaysia and Indonesia could encourage similar involvement from GCC governments looking to diversify their economies away from the oil industry.

©2018 funds global mena

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