Sunday 24 / November / 2024
Muscat: Global sukuk issuances declined for the second consecutive year during 2023 after showing a partial recovery in 2022, according to a new report.
“Total sukuk issuances during the year stood at $108 billion, the lowest in five years as compared to $127.4 billion in 2022,” the Kuwait-based Kamco Invest said in its latest report.
“Saudi Arabia was the top global sukuk issuer during the year for the fourth straight year with aggregate issuances reaching $38.4 billion (including supranational sukuk issuers headquartered in Saudi Arabia), although total issuances in the Kingdom declined year-on-year from $44.5 billion in 2022,” the report added.
Sukuk (Islamic bond or Sharia-compliant bond) is an Islamic financial certificate that represents a portion of ownership in a portfolio of eligible existing or future assets. They can be considered as an Islamic version of conventional bonds.
“Sukuk issuance in 2023 in Saudi Arabia was also the lowest in three years. Malaysia was next with aggregate sukuk issuances at $26.2 billion in 2023 compared to $38.8 billion in 2022. Issuances in Malaysia were the lowest in nine years during 2023,” Kamco Invest said in its report.
The UAE ranked third globally with total sukuk issuances reaching $10.8 billion during 2023 as compared to $4 billion in issuances during the previous two years. UAE’s ranking improved against Indonesia, Turkey and Pakistan in 2023. Green sukuk issuance declined for the fourth straight year to reach $1.25 billion in 2023.
The Kamco Invest report further indicates that sovereign sukuk issuers continued to lead during 2023 with higher issuances as compared to corporates. However, the share of government issuances declined significantly as compared to 2022 as well as against historical levels. Total government sukuk issuances stood at $57.9 million in 2023, the lowest in seven years, as compared to $83.3 billion in 2022. On the other hand, corporate sukuk issuances were the highest on record during 2023, reaching $50 billion during the year as compared to $44.1 billion during 2022. This was also reflected in the record share of corporate sukuk issuers which reached 46.3 percent during 2023 as compared to 34.6 percent during 2022.
Higher sukuk issuances by Saudi Arabia and UAE also supported aggregate issuances in the Gulf Cooperation Council (GCC) as compared to the rest of the world. Total sukuk issuances in the GCC stood at $49.8 billion in 2023 as compared to $49.7 billion in 2022 whereas non-GCC global sukuk issuances stood at $58.1 billion in 2023 as compared to $77.7 billion in 2022. Sukuk issuances by GCC governments declined during the year to reach $23.4 billion as compared to $32.2 billion in 2022.
On the other hand, a solid increase in corporate issuances that reached $26.4 billion in 2023 as compared to $17.4 billion in 2022 more than offset the decline in sukuk issuances by GCC governments. Within the GCC, sukuk issuances from the Saudi government declined during 2023 to reach $17.9 billion against $29.2 billion in 2022. This decline was partially offset by higher issuances by UAE and Bahraini sovereigns, the Kamco Invest report said.
