Sovereign Sukuk Issuances to be Driven by Funding Requirements and Impending Maturities: Fitch

In a recent report on the 28th of April 2021, Fitch Ratings (Fitch) states that sovereign Sukuk issuance will likely be fuelled by countries’ needs to diversify their funding sources and to meet imminent maturities alongside demand from investors.

Why it Matters?

Economic recoveries and higher oil prices amongst other factors could lead to lower requirements for funding for sovereigns in 2021. However, one-off or infrequent issuances are expected to add to 2021 volumes. In 2020, total Sukuk issuance (both domestic and external) increased 29% to USD 75 billion for Bahrain, Indonesia, Malaysia, Oman, Saudi Arabia and Turkey, which are usually the largest-Sukuk-issuing sovereigns. Financing needs surged in 2020 owing to elevated fiscal deficit on...