Photo: U.S. dollars and Malaysian ringgit being counted at a currency changer in Kuala Lumpur, Malaysia, on July 17, 2019. Wadi Alias /

Islamic Finance

Nine-month global sukuk issuances beat full-year projection, Malaysia leads – RAM Ratings

Malaysian credit rating agency RAM says global sukuk issuance for the first nine months of 2019 reached $92.7 billion, beating its full-year projection of $80 - $90 billion.

The nine-month total was a 34.7% increase from the $68.8 billion issued at the same period last year, according to Salaam Gateway calculation of data from RAM.

Malaysia still leads all sukuk issuance globally, said RAM.

“Notably, Malaysia maintained its leadership with a market share of 38.05% of global sukuk issuance while Saudi Arabia (19.2%) and Indonesia (17.7%) ranked a respective second and third,” Ruslena Ramli, RAM’s head of Islamic finance, told Salaam Gateway on Friday (October 25).

Malaysia’s lead was helped by high local currency issuance that reached 185.5 billion ringgit ($44.3 billion) at the end of September versus 123.9 billion ringgit at the same time last year, according to RAM.

“The growth was primarily due to increased issuances from the corporate sector (+144% to 83.9 billion ringgit which include Urusharta Jamaah Sdn Bhd’s one-off 27.6 billion ringgit sukuk) and the Government (+1.9% to 52.5 billion ringgit),” said Ruslena.

Malaysia’s dominance was confirmed by Fitch Ratings in a statement on October 17.

“Beyond the GCC, Malaysia has remained the key source of sukuk supply in 2019. Increased volumes have been driven by Bank Negara Malaysia providing more short-term Islamic Treasury Bills to aid liquidity management at Islamic financial institutions, and also by a surge in local-currency corporate issuance,” said Fitch.

In addition to Malaysia, RAM Ratings identified Turkey, Bahrain, Qatar, and Indonesia as the five top countries driving sukuk issuance.

“The top five countries contributing to this stronger growth was led by Turkey (from $964.9 million as at end-September 2018 to $6.0 billion as at end-September 2019), followed by Bahrain (+71.8% increase to $2.2 billion), Malaysia (+55.9% to $35.3 billion), Qatar (+53.1% to $3.9 billion) and Indonesia (+28.2% to $16.5 billion),” said Ruslena.

RAM’s projection of $90 billion in sukuk issuance for 2019 is conservative compared to Moody’s that said in August it expects this year’s number to rise by 6% to around $130 billion.

According to Moody’s, $87 billion in sukuk were issued in the first six months of this year, and it expects $43 billion more to be sold in the second half of 2019.

RAM put total global sukuk issuance at $94.4 billion for 2018, beating its projection of $75 billion - $85 billion.

($1 = 4.1863 Malaysian ringgit)

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