Global Sukuk issuance expected to rise to $140-$155bn in 2021

SectorFinancial Markets

Mubasher: Global Sukuk issuance is expected to rise to around $140-$155 billion in 2021, driven by a recovery in issuance in Malaysia, Indonesia, and the GCC countries, according to a report by S&P Global Ratings. In 2020, the global Sukuk issuance decreased to $139.8 billion from $167.3 billion in 2019. The credit rating agency also forecast that Islamic finance countries would see average unweighted growth in GDP of 4.6% in 2021 after a sharp recession in 2020. Last year, the Islamic finance countries recorded an average unweighted contraction in GDP of 3.7% due to the coronavirus (COVID-19) pandemic and low oil prices.

Meanwhile, the oil price is predicted to stabilise at around $50 per barrel in 2021.  All these factors will support a stronger performance by the global Sukuk market in 2021 when compared to 2020. However, the COVID-19 pandemic still imposes risks on the Islamic finance countries due to doubts over whether the pandemic would be brought under control. "Finally, while more restructurings or defaults could occur in 2021, if investors are able to gain clarity on their financial recourse mechanisms, this more...