Arabian Business News

Gulf sukuk issuance forecast to remain stagnant for months

Corporate and infrastructure sukuk issuance in the Gulf region and Malaysia has continued to stagnate so far this year and this may carry over to the coming quarters, according to S&P Global Ratings. Despite the slump, essential infrastructure funding requirements, low interest rates, and investors' appetite for Islamic assets in their portfolios continue to be supportive for the world's core corporate sukuk markets.

In the GCC, corporate and infrastructure sukuk issuance totalled $2.5 billion in the first eight months of 2016, compared with $2.3 billion for the preceding eight months. Versus the same periods in 2013 and 2014, issues are down sharply from $5 and $6.5 billion, respectively, S&P said.
"Further out, we see possible brighter prospects for issuing corporate and infrastructure sukuk over the medium to long term. We estimate that Gulf government spending on projects alone - including infrastructure contracts awarded over 2016-2019 - could be about $330 billion," said S&P Global Ratings analyst Karim Nassif.

Turkish Airlines considering multibillion dollar sukuk issue

Turkish Airlines discusses the possibility of issuing a sukuk aiming to provide financial means for the purchase of aircraft, necessary because of the company's expansion. So far, they are examining markets in order to make a decision. For the purpose considered multibillion will be needed. Last year sovereign issuance drove the sukuk market last year to a height US$85bn more than the year before, which constitutes a growth of over 90%.

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