S&P Forecasts a Decline in Issuances in its 2020 Outlook for the Global Sukuk Market

S&P Global Ratings (S&P) has forecasted global Sukuk issuances at around USD 100 billion for 2020, down 40% YoY. This reduction comes on the back of lower oil prices, as well as muted economic performance in core Islamic finance markets as these countries focus on overcoming the COVID-19 pandemic.

S&P also stated that most government issuers may prefer conventional securities over Sukuk as they struggle with the impact of a weaker economic environment on their budgets. S&P added Sukuk issuances are also a lot more complex than that of a conventional security and there is increasing risk-aversion among investors. The rating agency also predicted that the number of defaults among Sukuk issuers with low cred...