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Despite a slowdown in sukuk issuances from core markets during the first quarter, the pipeline for the Islamic bonds is building up for Q2, according to Fitch Ratings.
Sukuk issuance from core markets in Q1 was $45.3 billion, down 18.5% quarter on quarter. “Persistent macro volatilities and uncertainties, contraction in global liquidity and investor risk appetite, and monetary tightening is affecting sukuk and bond issuance in regions where Islamic finance is active,” said Bashar Al-Natoor, Global Head of Islamic Finance at Fitch.
“However, Islamic investor’s liquidity and investment appetite continues to be supportive of the longer-term sukuk story.”
The agency said while rising oil prices following the OPEC+ production cut will reduce new financing needs for many oil-exporting sovereigns, a number of core oil-importing countries, like Malaysia, still have funding needs and are expected to have budget deficits in 2023.
(Writing by Brinda Darasha; editing by Daniel Luiz)
