The year-end sukuk issuance slowdown could come earlier than usual in 2021 as volatility and uncertainties spike on concerns about the new COVID-19 variant Omicron, according to Fitch Ratings.

The global ratings agency said concerns hinged around the re-emergency of COVID cases due to the new variant and possible further lockdowns in some countries.

Bashar Al Natoor, Global Head of Islamic Finance, at Fitch Ratings, said in most of the Organisation of Islamic Cooperation’s 57 states vaccination levels are still below the 70 to 80 percent which is suggested as consistent with herd immunity.

‘’New COVID-19 variants (in this case Omicron) come with additional uncertainties. These include whether Omicron will have an increased transmissibility and/or pose higher health risks, the level of vaccines efficiency and whether protection against this variant is maintained.’’

According to Fitch data, of the key Islamic finance jurisdictions, the UAE has the highest levels of vaccination at 90 percent, followed by Malaysia and Qatar at 78 percent, Bahrain at 71 percent, Saudi Arabia at 65 percent, while Oman is 57 percent vaccinated. Bangladesh has the lowest levels of vaccination of the key Islamic finance jurisdictions at 22 percent.

(Writing by Imogen Lillywhite; editing by Seban Scaria) 

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© ZAWYA 2021