Sukuk issuances are expected to show modest growth in 2020, continuing the expansionary trend of the past few years.
Moody’s, the global ratings agency, expects global long-term sovereign sukuk issuance to rise by 6 percent to $75 billion (275.4 billion dirhams) in 2020, as more governments look to raise money to meet the financing requirements of responses to the coronavirus pandemic.
Christian de Guzman, a Moody’s senior vice president said, “Issuance in 2020 would likely surpass our forecasts should oil prices and demand be durably dampened as a consequence of the coronavirus outbreak, leading to higher deficits and financing requirements among hydrocarbon-exporting issuers, including those in the Gulf Cooperation Council (GCC) and Southeast Asia.”
Zawya has collated the list of top 10 sukuk issuers during the first half of the year:
Here’s the top 5 countries by amount of issuance:
However, in a recent report, S&P Global ratings said that investors' risk aversion is subsiding, thanks among other factors to strong global liquidity.
Over the past few weeks, issuers with good credit quality have approached the market, either by reopening sukuk or tapping established programs, the ratings agency noted.
"Despite this glimmer of optimism, total issuance volume for the full year 2020 will be lower than in 2019 since corporates are holding on to cash, cutting capital expenditure, and using bank financing," S&P Primary Credit Analyst Mohamed Damak said in a note.
"Central banks have already taken measures to boost banks' liquidity in core Islamic inance countries, so they are unlikely to issue sukuk as liquidity management instruments this year," he added.
(Writing by Seban Scaria with inputs from Jinan Al Taitoon, Refinitiv Islamic Finance Research Team. Edited by Daniel Luiz)
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