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Moody’s expects $190bn to $200bn sukuk in 2021

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NEW YORK: Gross short and long-term sukuk issuances in 2021 are expected to reach between $190 billion and $200 billion, Moody’s said in a latest report.
According to the ratings agency, volumes will, however, be below $205 billion recorded in 2020, as rapid mass vaccination campaigns and monetary and fiscal measures by governments and central banks in the region have supported the economic rebound.
“We expect issuance of between $90 billion and $100 billion in the second half of the year, bolstered by continued economic recovery, improved liquidity in debt markets and strong investor demand,” said Moody’s.
The International Monetary Fund expects the world economy to expand 6 percent in 2021 after last year plunging into its worst recession since the 1930s.
Moody’s expects sovereign issuances in Malaysia and Indonesia, where funding needs remain high, to drive sukuk issues in the remainder of the year. “We also anticipate increased issuance from corporates and banks,” Moody’s said.
“A steady stream of new issuers have joined the sukuk market in recent years and we expect this trend to continue.” Moody’s expects green sukuk issuance to also accelerate this year as governments promote sustainable policy agendas, prompting new issuers to consider it as an alternative financing tool. – TLTP