DOHA: Global sukuk issuance is likely to maintain its positive long-term growth trends. The drivers of this continued growth include increasing demand from Islamic financial assets and global investors’ increasing familiarity and comfort with the sukuk instruments, Moody’s Special Comment on “Global Sukuk” noted.
The report highlights that the Arab and Malaysian markets will continue to dominate issuance, although Turkey and Indonesia have the potential to become key Sukuk markets in the long term.
“The strong growth and high likelihood of continued sukuk issuances reflects the growing investor comfort with these instruments as well as the increasing funding needs of sovereigns, corporate and banks particularly in Islamic countries across the Gulf Asia,” said Khalid Howladar, Moody’s Senior Credit Officer and co-author of the report said.
The report noted the GCC and Malaysia account for 90 percent of the $274bn worth of outstanding sukuk.
Malaysia’s deep sukuk investor base is a key driver behind the large market share. Qatar accounts for 6 percent of the total outstanding sukuk. With 12 percent, Saudi Arabia represents the maximum share in the GCC.
Although this amount is much lower than the record of $81bn issued in 2012, it still reflects positively on investor appetite for Shariah-compliant instruments in a year marked by challenging conditions in emerging markets, which were mainly driven by concern over the outlook for US monetary policy.
Moody’s estimate that sukuk issuance will reach around $60bn in 2014. The Peninsula
