According to the data issued by Moody’s Agency for Investors Services from 2019 to the third quarter of 2021, shows the Kuwaiti Islamic banks have recorded the fourth best growth rate in financing operations in the world better than traditional banks during the Covid-19 pandemic, reports Al-Rai daily.
In a recent report, the agency stated, Kuwait is the fifth largest major market for Islamic finance in the world, while Saudi Arabia still maintain its first position, pointing out that the adoption of the Public Debt Law may enhance the issuance of sovereign sukuk, given the importance of sukuk in the Gulf region.
While Moody’s expects the law to be passed sometime this year, the daily sqaid there is a clear possibility that it will face further delays, given the track record of parliamentary stalemate, stressing that the law will ease ongoing liquidity pressures.
The report, on the other hand, stated in 2021, global long-term sovereign sukuk issuances declined, including those of multilateral development banks, due to the sharp decline in the financing needs of the main sovereign issuers of sukuk, explaining that this decline came in the wake of the record sovereign sukuk issuance volumes in 2020, and it is expected that issuances will witness a further decline in 2022 in light of the continued shrinking of the government deficit, amid high oil prices, a decrease in expenditures related to Corona and an acceleration of economic activity in the countries issuing basic sukuks.
The report added that the volumes of long-term sovereign sukuk issuances decreased by 22pc to $88b in 2021, as the sukuk-issuing governments witnessed a decrease in their total financing needs, noting that Saudi Arabia, Malaysia and Indonesia still dominate sovereign sukuk issuances, as they together accounted for about 77pc of sovereign sukuk issuances until the end of last year, while all of these governments recorded lower fiscal deficits in 2021.—Zawya News
