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Press Release
13 May | Monday
Malaysia’s sukuk issuance in 1Q 2019 shored up global performance

A total of USD12.8 bil of sukuk was issued globally in March 2019, which brought the YTD issuance value to USD39.5 bil at month-end (end-March 2018: USD28.7 bil). Malaysia maintained its leadership by commanding 35.1% (or USD13.9 bil) of the issued amount. Indonesia and Saudi Arabia came next, with respective shares of 17.0% (or USD6.7 bil) and 15.3% (or USD6.1 bil).

“A 38% y-o-y jump in global sukuk issuance bodes well for the pace of this segment’s performance in 2019. Key markets to watch are Indonesia, as the nation gears up for sovereign sukuk issuances in line with its sustainability agenda, and Saudi Arabia, whose persistent budget deficits may lead to a higher percentage of sukuk in its government funding mix,” highlights Ruslena Ramli, RAM’s head of Islamic Finance. Notably, Malaysia will remain at the forefront as an issuer, providing stability to the overall base of global sukuk issues. Malaysia recorded a 54.4% spike in sukuk issuance as at end-March 2019, compared to only USD9.0 bil a year earlier. The driver for this improvement came from the BNM Interbank Islamic Bills (BNIB-i) issuances which was introduced in March 2018 by the Financial Market Committee to support liquidity development for onshore financial markets. RAM envisage the BNIB-i issuances to grow further in 2019, due to its recognition as a high quality liquid asset (HQLA).

On the domestic front, outstanding sukuk increased 10.5% to RM880.3 bil as at end-March 2019 (end-March 2018: RM796.6 bil). Sukuk maintained its position as a leader in the overall Malaysian bond market, accounting for 60.9%. Notably, its share has been trending upwards since hitting 50% in 2013. A total of RM22.3 bil of domestic sukuk was issued in March, bringing the YTD issuance value to RM64.1 bil at month-end. Similar to historical trends, the financial services and infrastructure & utilities sectors were the chief drivers of the domestic sukuk market, with respective issuance values of RM11.4 bil and RM3.6 bil in 1Q 2019.

The Sukuk Snapshot is designed as a quick reference point for sukuk data and trends. This publication aims to serve the needs of market practitioners, enabling them to monitor global and Malaysian sukuk market developments. Subscribers can retrieve the Sukuk Snapshot via our website, www.ram.com.my. Non-subscribers may purchase the report at RM500 per copy.
 

Analytical contact
Irfan Afifah Mohd Zaki
(603) 3385 2551
irfan@ram.com.my

Media contact
Padthma Subbiah
(603) 3385 2577
padthma@ram.com.my

Publication Sales
AIN Sulaiman/Faiez Zulkifli
(603) 3385 2596/2597
ain@ram.com.my
faiez@ram.com.my

 Date of release: 13 May 2019

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2019 by RAM Rating Services Berhad

 
 
 
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