The GCC sukuk market has reached an “inflection point” in terms of new issuance, propelled by a fast growing appetite for infrastructure finance as the UAE emerged as the third global growth market for Islamic bonds, Standard & Poor’s said on Monday.
In the GCC, the UAE has become the second market for sukuk in the year to July with $5.3 billion. Saudi Arabia now leads the GCC ranks with $8.8 billion, replacing Qatar, which is currently in third with $4 billion. The kingdom is currently the second-largest global issuer behind Malaysia at $51.6 billion, after the government made moves to support Islamic finance.
“The GCC market crossed $19 billion in issuance as at July 2012, about the same as for all of 2011. Of that, infrastructure represented 30 per cent, compared with just seven per cent the previous year, said S&P credit analyst Karim Nassif. “The reasons for the surge are low yields, relatively high liquidity, large capital expenditure needs, and strong investor appetite,” he said at a media roundtable on Monday.
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