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RAM Ratings: Malaysia maintained sukuk leadership in 1H 2018

Published on 09 Aug 2018.

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RAM Ratings observed that Malaysia retained its pole position as a sukuk hub in 1H 2018, accounting for 38.7% of global sukuk issuance as at end-June 2018. It was followed by Saudi Arabia (17.7%) and Indonesia (13.2%). “The share of ringgit sukuk has moved ahead of dollar sukuk, making ringgit again the preferred currency for global sukuk in 1H 2018,” notes Ruslena Ramli, Head of Islamic Finance at RAM Ratings. Ringgit sukuk constituted the largest share of the global sukuk market at 34.2%, bringing dollar sukuk to second place (26.0%) as at the same date. However, total global sukuk issuance decreased 5.2% to USD50.3 billion in 1H 2018, from USD53.0 billion in the previous year. RAM Ratings expects global sukuk issuance to hit USD75.0 billion-USD85.0 billion in 2018.

RAM Ratings’ latest Sukuk Snapshot edition reports that the Gulf Cooperation Council’s (GCC) share of sovereign sukuk issuance remained strong. This indicates a reversal of earlier trends, where sovereign sukuk averaged around 25% of the GCC’s total sukuk issuance. As at end-June 2018, GCC sovereign sukuk represented a market share of 67.6% of total GCC sukuk issuance. For Malaysia, the growth momentum in 1H 2018 has been largely supported by domestic demand, sustained by increased corporate issuance, which rose 14.2% y-o-y to RM41.9 billion (1H 2017: RM36.7 billion). Effective March 2018, Islamic securities under Bank Negara Malaysia (BNM) have been slowly making a comeback following their withdrawal from the market since 2016. 

The Sukuk Snapshot is designed as a quick reference point for sukuk data and trends. The publication aims to serve the needs of market practitioners, enabling them to monitor global and Malaysian sukuk market developments. Subscribers can retrieve the Snapshot via our website, www.ram.com.my. Non-subscribers may purchase the report at RM500 per copy.

 

Analytical contact
Irfan Afifah Mohd Zaki
(603) 7628 1196
irfan@ram.com.my

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(603) 7628 1162
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The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2018 by RAM Rating Services Berhad



Publication Date Published Category
Sukuk Snapshot August 2018 09-Aug-2018 Sukuk Snapshot View PDF

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