Global #Sukuk Market Outlook: the surge in Sukuk issuance isn't the new normal

The Sukuk market performed strongly in the first half of 2017 as issuance increased by 37.7% in the first six months of the year. This was primarily driven by the jumbo local and foreign currency issuances by some GCC governments. Sovereign issuers turned to Sukuk because wanted to diversify their investor base and to benefit from the good liquidity conditions in local and global financial markets. S&P Global Ratings expects the volume of Sukuk issuance to remain strong in 2017, but this is likely to be the exception rather than a new norm. In their view, the large transactions in the first half of 2017 are unlikely to be repeated in 2018. It remains to be seen if the recent developments in Qatar will impact issuance out of the country. Qatar was placed under sanctions by a group of governments that cut diplomatic ties and trade and transport links.