Thomson Reuters has released the findings of its fifth consecutive Sukuk Perceptions and Forecast study. Despite a bleak 2015, market players remained hopeful for robust year ahead with expectations of oil-exporting countries in core markets to turn to Sukuk as a primary debt management tool. Core markets have adapted to ongoing low oil prices, while apprehension over expected global interest hikes has begun to subside.
However, the decision from Bank Negara Malaysia (BNM) to cut short-term Sukuk issuances continues to dampen Sukuk supply. Moreover, the shift in sovereign issuers’ preference from Sukuk to conventional bonds has contributed further to the decline in supply. Total Sukuk issued in the first 9 months of 2016 dropped further by 18.46 per cent to $39.8 billion from $48.8 billion for the same period in 2015.
Nadim Najjar, Managing Director, Middle East & North Africa, Thomson Reuters, said, “The global Sukuk market continued to drop in terms of volume and value during 2016, albeit at a much slower pace than in 2015.—Reuters