With economies battling Covid-19 crisis, global sukuk issuance in 2020 may see additional sovereign Sukuk to support fiscal stimulus

Published on 31 Mar 2020.

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The global sukuk market delivered a noteworthy performance in 2019, notching up USD130.2 bil of gross issuance – a 41.6% jump from USD91.9 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%). Even though issuance by non-core markets surged 138% to USD13.3 bil last year (2018: USD5.6 bil), the global sukuk market remained dominated by the Gulf Cooperation Council (GCC, 40%), Malaysia (34%) and Indonesia (15%).

In terms of sovereigns, Saudi Arabia maintained its lead in the global sovereign sukuk market with a 28.9% (USD21.4 bil) share, followed by Indonesia (25.3% or USD18.7 bil), Malaysia (18.5% or USD13.7 bil) and Turkey (USD7.0 bil or 9.5%). The primary fund-raising purpose was to support the respective countries’ budget deficits. In terms of corporate sukuk issuance, the top position was retained by Malaysia with USD31.2 bil (or a 55.3% share). The UAE came next with USD9.8 bil (17.3%), followed by Saudi Arabia (USD9.1 bil or 16.2%) and Qatar (USD2.1 bil or 3.6%). 

Going further into 2020, it is clear that the COVID-19 pandemic has wreaked havoc on every aspect of life, with no clear end in sight to date on how long the crisis will last. Undoubtedly, markets have been in turmoil and this will likely pose uncertainties with regard to future fund-raising activity. With governments worldwide still weighing the economic implications of COVID-19, various forms of financial aid through economic stimulus packages and interest rate cuts have been announced. 

The irony is, however, that the coronavirus crisis will also provide 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. 

Global economies are indisputably navigating choppy waters. 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. In the wake of the global equity market meltdown, the debt and sukuk markets will serve as a bulwark to shore up a country’s financial standing.  

RAM’s latest issue of Sukuk Snapshot reports that Malaysia retained its lead with a 34.5% share of the global sukuk market, followed by Saudi Arabia (23.4%), Indonesia (15.0%), the UAE (7.5%) and Turkey (6.8%). As at end-2019, the value of outstanding global sukuk had spiked up to USD574.1 bil (end-2018: USD454.5 bil), a positive indication of sukuk’s relevance as an alternative form of financing in the mainstream global financial sector.

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


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Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Registration of Credit Rating Agencies, 2011. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains. 


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Sukuk Snapshot March 2020 31-Mar-2020 Sukuk Snapshot View PDF