The Sukuk market performed strongly in the first half of 2017, but doesn’t augur an enduring trend, according to a new report called Global Sukuk Market Outlook: The Surge In Sukuk Issuance Isn’t The New Normal from S&P.
Issuance increased by 37.7 per cent in the first six months of this year, compared with the same period of 2016, underpinned primarily by the jumbo issuances of some GCC countries’ governments. The agency expects the total volume to reach $75bn-$80bn in 2017.
Sovereign issuers turned to Sukuk as they had time on their side, wanted to diversify their investor base, and to benefit from the good liquidity conditions in local and global financial markets.
While S&P Global Ratings expects the volume of Sukuk issuance to remain strong in 2017, this is likely to be the exception rather than a new norm.