The volume forecast comes despite issuance in the first half of the year increasing 3 percent to $102 billion thanks to sales in Malaysia and Indonesia. Issuances increased by 22 percent in Southeast Asia, and represented more than half of the total in the first half of the year, while Gulf issuances fell by 19 percent.
“Greater corporate activity is partly offset by lower GCC government issuance,” Moody’s said.
Moody’s expected the total sukuk issuance this year to reach between 190 and 200 billion dollars from the level of 205 billion dollars, a record level recorded last year, as the continued huge financing needs in Malaysia and Indonesia lead to large offerings from that region.
The issuances are also supported by the continued economic recovery, improved liquidity in the debt markets, and strong investor demand that exceeds the supply of sukuk for a long time.
Moody’s expects the sukuk market to continue on a long-term growth path. Volumes will be boosted by accelerating issuance of instruments such as green sukuk, low penetration and new issuers. This year witnessed the first issuance of the giant Saudi Aramco and the Maldives.