Islamic syndicated loans could make up for sukuk’s shortcomings – SP

SourceZawya
SectorFinancial Markets
CountryGCC

The Islamic syndicated loans market has been modestly outperforming sukuk in 2020, after Islamic countries were hit hard by the double impact of COVID-19 and low oil prices.Sukuk issuance fell by 27 percent year-on-year in the first half of 2020, S&P Global Ratings said, while syndicated loans in Islamic countries in the first half of 2020 were at $50.1 billion, 40 percent of the 2019 total.Core Islamic countries including the GCC states, Turkey, Malaysia, Indonesia are all facing economic contractions, and corporates have cut capital expenditure, while using banking facilities to stay afloat.It could be the case that governments find syndicated loans a more convenient solution: “S&P Global Ratings has observed that the Islamic syndicated loans market has been modestly outperforming the sukuk market this year.“Although the bulk of syndicated ...read more...