Published on 09 Aug 2018.
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.
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