The global sukuk issuance is expected to reach a range between $90 billion and $100 billion by the end of 2018, despite a 12% decline in the first six months of the year.
The GCC issuers were responsible for that decline, with lower issuances, but governments and corporate entities in Malaysia and Indonesia will push up the market by their regular issuance, according to a report released by Moody’s on Tuesday.
Among the factors that incentivised the global sukuk market, Saudi Arabia’s primary dealers' programme for government sukuk and the trading of sukuk in Turkey’s stock exchange.
The rise of green sukuk issuance in Malaysia and Indonesia could encourage other issuers, especially from the GCC, to enter the market.
"Over the long term, we expect sukuk issuance volumes to continue to grow as governments across the core Islamic finance markets shift their financing mix towards a combination of conventional and Islamic instruments," vice president and senior credit officer at Moody's Nitish Bhojnagarwala commented.