Sukuk, or Islamic bonds, issued from major Islamic markets has remained unchanged for the first nine months of 2019, compared to 2018, Fitch Ratings said in a research note on Thursday.
Sukuk issuance for the first nine months of the year with a maturity of more than 18 months from the Gulf Cooperation Council (GCC) countries, Malaysia, Indonesia, Turkey, and Pakistan totaled $30.6 billion, compared to $31 billion in the same period for 2018, the ratings agency added.
Fitch said this suggests that issuance volumes normalized in 2018, rather than decline as compared to record-hitting 2017. The average sukuk issuance for the first nine months of 2012-2016 was $29.3 billion – close to 2019 figures.
The agency noted that new issuances will be supported by refinancing activity, and lower oil prices which requires increased borrowing by oil-exporting sovereigns.
The lack of standardization of sukuk documentation, reporting standards, and sharia codification were pointed to as continued issues for the sector.
“Legal uncertainties relating to creditor treatment and enforceability in a default remain largely untested,” Fitch added.