Global issuance of sukuk, or Islamic bonds, is expected to decline modestly in 2020 after four years of consecutive growth, ratings agency Moody’s said on Tuesday.
Moody’s expects global sukuk issuance to be $170 billion this year, down from $179 billion in 2019.
“Lower issuance activity in the first half of the year can be attributed to the pandemic” said Nitish Bhojnagarwala, vice president at Moody’s Investors Service.
Sovereign issuance of shariah-commpliant debt was stable during the crisis, Moody’s said, even as fiscal deficits ballooned because of lower oil prices and spending related to the coronavirus pandemic.
The global sukuk market has grown rapidly from around $80 billion to $179 billion over the last four years, supported by large pools of sharia-compliant funds in the Gulf.