Global Islamic bond market to strengthen in 2014 – S&P

By bne IntelliNews February 4, 2014

Following a troubled 2013, with sukuk (Islamic bond) volumes dropping 13%, the global sukuk market will expand again in 2014, partly driven by corporate and infrastructure issuers in the GCC, Standard & Poor's said in a report on Feb 4. The long-term prospects for the sukuk industry remain promising as regulators continue to build and strengthen their frameworks to minimize barriers in the market and deepen liquidity, the ratings agency underscored.

S&P forecasts a double-digit growth in issuance by Gulf corporate and infrastructure entities, amid large infrastructure financing needs. Increasing private issuance could also signal a change in the sukuk market characteristics, S&P noted. The agency, likewise, expects that sovereign sukuk could be slowly emerging as an alternative to fund growth in African countries.

S&P is upbeat on the sukuk industry in Malaysia which reportedly already benefits from a broad sukuk investor base and liquid debt market. The increased interest from issuers, mainly in the Middle East and Asia, in tapping the Malaysian ringgit and US dollar market will continue over the next few years as Malaysia strengthens its leading position in the industry, S&P said.  Due to the fact that that Malaysia is adopting private sector investment, S&P believes that non-sovereign issuance could accelerate in 2014-2015, continuing the trend witnessed in 2013 at a global level. 

Related Articles

UAE to buy major stakes in Kazakh special economic zones

The United Arab Emirates’ (UAE’s) global port operator Dubai Ports World on March 24 signed two framework agreements to acquire stakes in Kazakhstan’s two Special Economic ... more

Survival of Iran nuclear deal appears far less likely under US Secretary of State Mike Pompeo

The odds on the Trump administration attempting to kill the Iran nuclear deal substantially shortened on March 13 with the firing-by-tweet of US Secretary of State Rex Tillerson and his replacement ... more

Billion-dollar petrochemical facility to be built in Turkey by Algeria's Sonatrach

Algerian national energy company Sonatrach has struck a deal with Turkey's Ronesans and Bayegan to build a petrochemical plant worth $1bn in Turkey, Turkish President Recep Tayyip Erdogan said on ... more

Dismiss