Malaysia International Islamic Financial Centre (MIFC) : RAM Ratings: Sovereign sukuk dominated global sukuk issuance in 1Q 2017

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02 May | Tuesday

RAM Ratings: Sovereign sukuk dominated global sukuk issuance in 1Q 2017

RAM Ratings’ latest edition of the Sukuk Snapshot reports sovereign issuance boosted the global sukuk market in 1Q 2017. The bulk of the sovereign issuance stemmed from Indonesia (43.4%), Qatar (17.6%), Malaysia (15.4%) and Hong Kong (8.0%).“Notably, Bahrain and Qatar have remained committed to continuously tapping the sukuk market. With the return of Saudi Arabia and the issuance of its USD9.0 billion sukuk on 13 April 2017 (its first USD-denominated sukuk), we envisage the other GCC nations to also consider including sukuk issuance as a debt-management strategy,” highlights Ruslena Ramli, Head of Islamic Finance at RAM Ratings.

In March 2017, a total of USD9.1 billion of sukuk was issued globally, which brought the YTD issuance to USD22.2 billion as at end-March 2017 (end-March 2016:USD24.1 billion). Despite a marginal reduction in global sukuk issuance, Malaysia maintained its leadership with 38.5% ofthe total. This was followed by Indonesia (24.7%), Qatar (9.9%) and the United Arab Emirates (9.0%).Outstanding global sukuk summed up to USD346.7 billion as at end-March 2017, with Malaysia maintaining its leadership by commanding 48.0% of the amount.

On the domestic front, outstanding Malaysian sukuk expanded 11.5% y-o-y, coming up to RM691.4 billion as at end-March 2017 (end-March 2016: RM620.1 billion). As a percentage of the entire Malaysian bond market, sukuk retained its lead with 57.0%. A total of RM18.3 billion of domestic sukuk was issued during the month, bringing YTD issuance value to RM37.6 billion as at end-March 2017. The financial services sector was still the main driver of the domestic sukuk market, with RM10.5 billion of issuance during the quarter (1Q 2016: RM2.0 billion).

The Sukuk Snapshot is aquick reference point for sukuk data and trends. This publication enables market practitioners 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 RM530 (inclusive of GST) per copy. For further enquiries, please contact Ain at (603) 7628 1108 or Faiez (603) 7628 1104, or fax (603) 2711 1701/ (603) 7620 8250, or e-mail ain@ram.com.my or faiez@com.my.my.