The Malaysian Reserve

Malaysia continues to lead in sukuk issuance

In the same corresponding period last year, Malaysia recorded US$18.6 billion of sukuk issuance (Pic: TMRpic)

By KEVIN WONG / Pic By TMR

Malaysia continues to lead in sukuk issuance and financing support, according to RAM Rating Services Bhd’s (RAM Ratings) First Half of 2018 Sukuk Review Report.

At the end of June 2018, the country increased its sukuk issuance to US$19.4 billion (RM78.38 billion), which translated into a healthy 38.7% market share of the global sukuk issuance.

In the same corresponding period last year, Malaysia recorded US$18.6 billion of sukuk issuance.

Indonesia also charted a 52.6% jump to US$6.6 billion from US$4.3 billion last year.

By contrast, the Gulf Cooperation Council (GCC) posted a contraction of 19.1% to US$21.3 billion compared US$26.3 billion last year.

Nevertheless, the GCC’s sovereign sukuk issues took up the lion’s share (67.6%) of its total sukuk issuance, reversing earlier market trends.

At the end of June 2018, the total global sukuk issuance had slipped 5.2% year-on-year to US$50.3 billion from US$53 billion in the same corresponding time last year.

This was largely contributed by the declines in sukuk issuance from Qatar (-63.6%), Saudi Arabia (-37.9%) and Turkey (-18%).

Meanwhile, RAM Ratings has maintained the projected global sukuk issuance at US$75 billion to US$85 billion.

This is based on the growth trends in sukuk issues from Malaysia, Indonesia, Bahrain, Kuwait and the United Arab Emirates in the first six months of 2018.

“Overall, the sukuk market’s showing in 2018 will depend on the performance of the global economy and the state of investment recovery in key Islamic finance countries,” RAM Ratings Islamic finance head Ruslena Ramli said.