S&P Global Ratings said the Islamic instrument’s complex issuance process is working against it. Last year, global Sukuk issuance fell short of market expectations, although it was higher than in 2015. The Sukuk market will remain subdued in 2017, since the issuance process is still quite complex, S&P said in a recent article titled Will Sukuk Issuance Volumes Beat The Forecasts This Year?
When oil prices started falling in 2014, several market observers predicted an issuance boom from 2015, arguing that governments in oil-exporting countries would tap the Sukuk market to maintain their spending levels. “However, as we anticipated, this didn’t happen,” S&P said. “Issuance of Sukuk increased only marginally in 2016 compared with 2015.—Agencies