UAE Sukuk Issuance Sees a 76% Increase in the First Quarter of 2022 Despite Rise in Oil Prices

Sukuk issuances in the United Arab Emirates (UAE) witnessed a 76% increase to USD 1.25 billion globally at the end of the first quarter of 2022 (1Q 2022), compared to USD 710 million at the end of the first quarter of 2021 (1Q 2021), according to Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings.

Why it Matters?

The rise in oil prices has led to a decline in new financing needs. However, governments and institutions continue to issue Sukuk, despite the abundance of liquidity, to diversify financing sources and maintain activity in the market. Despite the rise in interest rates and the high administrative cost of issuing Sukuk compared to bonds, Sukuk offerings may still be necessary as demand surpasses supply and the yield curve shows...