null Funding Needs and Upcoming Maturities to Drive Sukuk Issuance
Funding Needs and Upcoming Maturities to Drive Sukuk Issuance
30 Apr 2021 | Friday Source: Fitch Ratings
Sovereign sukuk issuance momentum is likely to be driven by the need to diversify funding and meet upcoming maturities, along with intact investor appetite, Fitch Ratings says in a new report. Although less pandemic-related support, economic recovery and higher oil prices could result in lower financing needs for sovereigns, we expect one-off or infrequent issuance to support 2021 volumes.
Fitch estimates total sovereign sukuk issuance rose by 29% to USD75 billion in 2020 for Bahrain, Indonesia, Malaysia, Oman, Saudi Arabia and Turkey, usually the main sukuk-issuing sovereigns. A sharp increase in financing requirements contributed to record sukuk issuance by the six in 2020. After three years of growth, Fitch estimates that sukuk fell to 26% of market financing in 2020 from 30% in 2019.
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