KUALA LUMPUR, Aug 6 — Global sukuk issuance is set to fall five per cent this year to about US$170 billion (RM712.5 billion) because of the coronavirus crisis, after four years of rapid growth, Moody’s Investors Service said.
The ratings company said the total issuance in the first six months of 2020 dropped to US$77 billion, down 12 per cent from the same period last year, as activity in Malaysia and Indonesia flagged.
Meanwhile, issuance in Southeast Asia fell by 25 per cent, while volumes in the Middle East rose seven per cent.
Moody’s vice president — senior credit officer Nitish Bhojnagarwala said the decline, however, will be partly limited by the financing needs of the Gulf Cooperation Council countries because of lower oil prices and the Covid-19 pandemic.
“We expect issuance will rally in the second half of the year to around US$90 billion, led by sovereigns in the Gulf.
“Despite the decline, 2020 will still see the second highest sukuk issuance total ever, following a 36 per cent increase in 2019,” he said in a statement.
Nitish said volumes are likely to rebound in the second half of 2020, as governments raise money to finance their responses to the coronavirus crisis.
“Persistently low oil prices could also increase deficits and financing needs among oil-exporting issuers, primarily in Gulf countries,” he added. — Bernama
