Sukuk issuance seen up to $90B this year

dubai — Global sukuk issuance has surpassed last year’s total in the first 10 months of this year and are likely come in at $85-90 billion (Dh312-330 billion) for 2017, driven by stronger issuance from Malaysia and GCC countries.

Driven by their budget deficits, Saudi Arabia and its GCC neighbours had raised $42 billion of sukuk as at end-October 2017, an increase of 215.3 per cent yearon-year, Malaysian ratings agency RAM said in a note.

Last year, a total of $72.9 billion worth of sukuk was issued globally. Malaysia recorded $33.3 billion of sukuk issuance as at end-October 2017, an increase of 20.6 per cent year-on-year, exceeding its full-year projection of $24-$28.8 billion for the localcurrency market.

The global ratings agency said the growth was led by increased issuance by the quasi-government, an increase of 32.2 per cent or $9.17 billion; government, up by 17.7 per cent or $11.1 billion; and corporate, a growth of 17.7 per cent or $13 billion. International ratings agency S&P Global said Sukuk issuance is on the rise in the GCC region for corporate and infrastructure financing. Through the first nine months of 2017, issuance in this segment increased to $6.8 billion, up from $2.8 billion during the same period of 2016. And sukuk issuance came to more than half the total of all corporate and infrastructure debt of $12 billion for the 2017’s first three quarters.

The GCC currently faces high infrastructure project spending requirements of what S&P Global Ratings estimates to be about $120 billion-$150 billion annually — including transportrelated projects — between now and 2019. — waheedabbas@khaleejtimes.com