Global sukuks withstand market fluctuations, shows increase of 10.3 pc over last year

Fitch Ratings Agency revealed that the value of global sukuks was about $850 billion in 2023, an increase of 10.3% over the year 2022, despite the fluctuations in global markets and the geopolitical incentives for their issuance, pointing out that sukuks are a major financing tool in the primary markets of the Gulf states, Malaysia and Indonesia, Turkey and Pakistan.

Fitch said in its report that the share of sukuk issuance (in various local currencies) from global debt issuance markets is about 29% in 2023, compared to 35% in 2022, and 40% in US dollars last year, compared to 41.6% in 2022, reports Al-Anba daily.

The international rating agency explained that the UAE began issuing sukuks in dirhams last year, noting also that the Philippines and Egypt issued sukuks in local currencies for the first time in 2023, and South Africa also returned to the market.

The agency added, the sukuk issuance in US dollars in the primary sukuk markets grew by 40% in 2023 compared to 2022, to reach $52 billion, while the value of bonds in dollars increased by 53%.

However, Fitch said, the issuance of bonds in all currencies in the primary markets decreased by 19% in 2023 compared to 2022, while the issuance of bonds decreased by 6% last year, while explaining at the same time that the value of sukuk related to environmental, social and corporate governance standards will reach $36.1 billion in 2023, noting that Gulf sukuk worth approximately $53 billion were issued in all currencies last year, with the value of sukuk issuance in dollars in the region increasing by 178% compared to 2022.