THE global sukuk issuance in 2020 may see additional sovereign sukuk to support fiscal stimulus in battling Covid-19, said RAM Rating Services Bhd.
Despite wreaking havoc on every aspect of life, the pandemic has also provided a window of opportunity for sovereigns to raise funds to finance aid packages, and for corporates to lock in more attractive funding rates while taking stock of their financing maturity profiles.
“In such highly uncertain times, investors will seek safer havens by moving into bonds and sukuk, thereby benefiting some key economies in the sukuk market.
“Governments that can effectively use monetary and fiscal tools to steer their economies in the right direction will stand a fighting chance of emerging less battered by Covid-19,” the rating agency said in a statement today.
RAM Rating said in the wake of the global equity market meltdown, the debt and sukuk markets would serve as a bulwark to shore up a country’s financial standing.
In 2019, global sukuk gross issuance amounted to US$130.2 bil of gross issuance, a 41.6% jump from US$91.9 bil the previous year.
The top five countries by incremental value were Turkey (+320.4%), Qatar (+62.2%), Malaysia (+57.7%), Bahrain (+45.1%), and Indonesia (+26.2%).
In terms of sovereigns, Saudi Arabia maintained its lead in the global sovereign sukuk market with a 28.9% (US$21.4 bil) share, followed by Indonesia (25.3% or US$18.7 bil), Malaysia (18.5% or US$13.7 bil), and Turkey (9.5% or US$7.0 bil). — March 31, 2020, Bernama
