Sovereign sukuk issuance in the Gulf is expected to pick up pace in the second half of this year, driven by higher government funding needs amid lower oil prices and the pandemic-driven economic slowdown, according to Moody’s Investors Service.
Gulf sovereign borrowers are expected to raise a total of $34 billion (Dh124.78bn) through Islamic bonds this year, up from $25bn in 2019, the lead analyst of Moody's sovereign risk group, Thaddeus Best, said in a media call on Tuesday. The biggest rise will come from Saudi Arabia, the largest Arab economy, whose sukuk issuance is expected to grow by roughly $8bn in 2020, to $27bn.
“We expect a bit of an increase from Oman to $3bn this year and Bahrain to $1.5bn,” Mr Best said.
With lower oil prices, Gulf states continue to diversify their funding mix in favour of sukuk instruments to develop their Islamic debt markets. The upcoming refinancing of several sukuk issued after 2015 will also drive issuance, Moody’s said.
Globally, sovereign sukuk issuance volumes were broadly flat in the first half of 2020.
However, Moody’s expects a 43 per cent year-on-year increase in sovereign sukuk issuance to $94bn in 2020, driven by borrowers in the GCC, it said in a report released on Tuesday.
“We expect a recovery in market conditions and sovereigns’ sizeable borrowing requirements will support a full-year [rise],” the report said.
“Monetary stimulus measures implemented by central banks across the GCC – including the easing of capital requirement and prudential liquidity measures – should help to free up liquidity in the banking system, supporting demand for sukuk and other securities.”
Overall sukuk issuance in the Gulf, which includes sovereigns, financial institutions and corporate borrowers, is also expected to rise this year, despite a drop in total global sukuk issuance, Moody’s senior credit officer Nitish Bhojnagarwala said during the call.
Moody’s expects global sukuk issuance to shrink 5 per cent this year to around $170bn, the first drop after four years of expansion. The total value of sukuk grew 36 per cent in 2019.
Despite the anticipated decline on last year's figure, the total value of sukuk issued this year “is expected to be the second highest issuance level ever”, the ratings agency said.
Globally, the issuance of Sharia-compliant bonds reached $77bn in the first half of this year, of which GCC issuers accounted for $28bn, a 7 per cent year-on-year increase.
MATCH INFO
Uefa Champions League, semi-final result:
Liverpool 4-0 Barcelona
Liverpool win 4-3 on aggregate
Champions Legaue final: June 1, Madrid
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
RESULT
Brazil 2 Croatia 0
Brazil: Neymar (69'), Firmino (90' 3)
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Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
MATCH INFO
Euro 2020 qualifier
Croatia v Hungary, Thursday, 10.45pm, UAE
TV: Match on BeIN Sports
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UAE currency: the story behind the money in your pockets
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Indian origin executives leading top technology firms
Sundar Pichai
Chief executive, Google and Alphabet
Satya Nadella
Chief executive, Microsoft
Ajaypal Singh Banga
President and chief executive, Mastercard
Shantanu Narayen
Chief executive, chairman, and president, Adobe
Indra Nooyi
Board of directors, Amazon and former chief executive, PepsiCo
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