KUALA LUMPUR: Global sukuk issuance reached US$39.5 billion at end-March, with Malaysia maintaining its leadership, accounting for 35.1 per cent or US$13.9 billion of the issued amount.
Indonesia and Saudi Arabia came next, with respective shares of 17.0 per cent or US$6.7 billion and 15.3 per cent or US$6.1 billion, according to RAM Ratings.
In a statement yesterday, the rating agency said a total of US$12.8 billion of sukuk was issued globally in March.
RAM head of Islamic finance Ruslena Ramli pointed out that a 38 per cent year-on-year jump in global sukuk issuance bodes well for the pace of this segment’s performance in 2019.
“Key markets to watch are Indonesia, as the nation gears up for sovereign sukuk issuances in line with its sustainability agenda, and Saudi Arabia, whose persistent budget deficits may lead to a higher percentage of sukuk in its government funding mix,” she said.
RAM Ratings expects Malaysia to remain at the forefront as an issuer, providing stability to the overall base of global sukuk issues.
Malaysia recorded a 54.4 per cent spike in sukuk issuance as at end-March 2019, compared with US$9.0 billion a year earlier, driven by the introduction of Bank Negara Malaysia’s Interbank Islamic Bills (BNIB-i) issuances.
RAM Ratings said it expects the BNIB-i issuances to grow further in 2019, due to its recognition as a high quality liquid asset.
“On the domestic front, outstanding sukuk rose 10.5 per cent to RM880.3 billion as at end-March, and maintained its position as a leader in the Malaysian bond market, accounting for 60.9 per cent.
“Notably, its share has been trending upwards since hitting 50 per cent in 2013,” it said.
A total of RM22.3 billion of domestic sukuk was issued in March, bringing the year-to-date issuance value to RM64.1 billion at month-end.
The rating agency said the financial services, as well as the infrastructure and utilities sectors were the chief drivers of the domestic sukuk market, with respective issuance values of RM11.4 billion and RM3.6 billion in the first quarter. –Bernama
