KUALA LUMPUR: Sukuk issuance is expected to grow by six percent to around US$130 billion this year, said Moody’s Investors Service. In a statement yesterday, it said that although the projection was slightly down from the eight percent increase in 2018, it would still mark the fifth consecutive year of expansion.
“Our full-year expectation reflects robust issuance of US$87 billion during the first half of 2019, spread across short and long term instruments. “We expect the secondhalf sukuk issuance volumes to moderate to around US$43 billion, as the strong issuance in the first six months has reduced sovereign and corporate funding needs,” it said.
Moody’s also said that the government and corporate entities in Malaysia and the Gulf Cooperation Council countries — particularly Saudi Arabia — are expected to continue issuing it regularly. It also said that new entrants and green sukuk would stimulate the issuance as some African sovereigns are expected to enter the market, adding that Egypt had set up a Shariah supervisory committee in April 2019 to oversee sukuk issuance.
“While the green sukuk market is still in its infancy, we expect issuance to accelerate as efforts to combat climate change gain traction, building on initial green sukuk transactions in Malaysia and Indonesia,” it said. – Bernama
