|17 October, 2019

Volume of sukuk issuance from top Islamic finance markets steady in 2019 - Fitch

US dollar issuances from Turkey, Indonesia, Islamic Development Bank Trust Services Limited and First Abu Dhabi Bank alone raise a total of $6.5bln

Muslims, including one clutching prayer beads, attend Friday prayers during the opening of the Ibn-Rushd-Goethe Mosque on June 16, 2017 in Berlin, Germany. Image used for illustrative purposes.

Muslims, including one clutching prayer beads, attend Friday prayers during the opening of the Ibn-Rushd-Goethe Mosque on June 16, 2017 in Berlin, Germany. Image used for illustrative purposes.

Getty Images/Sean Gallup

International sukuk issuance from major Islamic finance markets was mainly unchanged in the first nine months of 2019 compared to the same period last year, Fitch Ratings said.

According to the ratings agency, sukuk issuance with a maturity of more than 18 months from the GCC, Malaysia, Indonesia, Turkey and Pakistan totaled $30.6 billion for the period compared to $31.0 billion for the first nine months of 2018.

US dollar issuances from Turkey, Indonesia, Islamic Development Bank Trust Services Limited and First Abu Dhabi Bank alone raised a total of $6.5 billion.

“Moreover, these figures do not capture the recent growth in domestic local-currency issuance, such as Saudi Arabia's riyal-denominated local issuance programme,” Fitch noted.

Saudi Arabia raised 8.834 billion Saudi riyals ($2.36 billion) in September  through a local currency-denominated sukuk.

According to Fitch, beyond the GCC, Malaysia has remained the key source of sukuk supply in 2019.

The agency noted that full-year 2019 volumes might be highly influenced by the funding needs and strategies of large individual borrowers, which may come to the market before year-end, and by geopolitical developments.

“GCC debt markets are still relatively developing, and individual sovereign funding decisions can profoundly affect total supply,” Fitch said.

“For example, the Saudi Debt Management Office said earlier this year that it plans a new benchmark international Islamic bond issuance as part of its plans to diversify the financing of its national budget deficit, which could boost the 2019 total if executed before year-end,” it added.

(Reporting by Gerard Aoun; editing by Seban Scaria)

(gerard.aoun@refinitiv.com)

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