Global sukuk likely to hit US$90b this year

KUALA LUMPUR, Nov 16 — Global sukuk issuance will likely reach US$85 billion-US$90 billion (RM356-377 billion) in 2017, driven by stronger issuance from Saudi Arabia, Malaysia, Qatar, Bahrain and Oman.

Notably, sukuk issuance was significantly boosted by the Gulf Cooperation Council (GCC), according to local rating agency RAM Rating Services Bhd in a statement today.

Driven by their budget deficits, it said Saudi Arabia and its GCC neighbours had raised sukuk worth US$42 billion at end-October, which was a 215.3 per cent increase from a year ago.

Malaysia, meanwhile, recorded RM138.7 billion (+20.6 per cent y-o-y) worth of sukuk issuance as at end-October, which exceeded RAM’s full-year projection of RM100 billion–RM120 billion for the local-currency market.

The growth was led by increased issuance by the quasi-government (+32.2 per cent or RM38.2 billion), government (+17.7 per cent or RM46.5 billion) and corporate (+17.7 per cent or RM54 billion) sectors.

RAM said Bank Negara Malaysia’s decision to maintain overnight policy rate at 3.0 per cent during its November meeting, could spur more sukuk issuance before the end of the year after hinting that monetary policy might be tightened next year. — Bernama

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