Oil prices will help shape sukuk market performance in 2019: S&P - The Peninsula Qatar

Oil prices will help shape sukuk market performance in 2019: S&P - The Peninsula Qatar:

S&P Global Ratings anticipates a total global sukuk issuance of $105bn-$115bn this year. The rating agency expects higher demand for funding in most GCC countries, given the reduced oil price assumptions compared with last year’s outturn of $71 for Brent . Tightening liquidity conditions worldwide, high geopolitical risks in the Middle East, and challenges inherent to sukuk issuance will likely dampen sukuk market performance in 2019.

Malaysia is expected to continue to support market growth. Last year, new sukuk issuance totaled around $91.4bn compared with $95.7bn in 2017. The decrease was even more visible, at 15.1 percent, for foreign currency sukuk issuance, primarily in US dollars. The marked drop in issuance in Saudi Arabia and Qatar were partly offset by issuances from the Central Bank of Kuwait and a hike in private-sector issuances in the UAE.

Activity in Malaysia and to a lesser extent Indonesia continued to support the market, contributing collectively to around 52 percent of new issuance in 2018. Issuers in Turkey also stepped up their issuances to diversify their investor bases amid substantial reliance on external debt and reduced access to global capital markets in the second half of the year.