Despite a solid first six months of the year, Sukuk activity for 2021 will consolidate following 2020’s record issuance; however, new entrants and low penetration will support the long term growth, Moody’s Investors Service said in a report published today.
“Sukuk issuance will be flat or slightly lower this year, as higher oil prices have reduced sovereign funding needs in GCC countries,” says Ashraf Madani, a VP-Senior Analyst at Moody’s and the author of the report. “We expect total gross short- and long-term Sukuk issuance in 2021 to reach between $190 billion and $200 billion after a record $205 billion in 2020.”
Improving economic conditions and high funding needs will support issuance activity in Southeast Asia. Malaysia will continue to dominate global Sukuk issuance with activity primarily denominated in local currency.
Moody’s expects the Sukuk market to maintain its long-term growth trend, backed by new entrants, low penetration and innovative new Islamic products, such as green and sustainable sukuk.
