Moody's Sees Higher Sukuk Issuance In Malaysia In Second Half Of Year

KUALA LUMPUR, Oct 9 (Bernama) -- Malaysia is projected to register a higher sukuk issuance in the second half (2H) of this year despite lower domestic sovereign issuance in the first half (1H), according to Moody’s Ratings.

Its assistant vice president Abdulla AlHammadi said the projection was based on the country's fiscal deficit, which is expected to hit 4.4 per cent in 2024 and narrow to 3.8 per cent in 2025.

“We are expecting issuances coming from Malaysia, maybe in the first half of 2024 it was a Gulf Cooperation Council (GCC) story, but we are expecting more coming from Malaysia in the second half,” he said in a virtual 2024 Global Islamic Finance Industry Update roundtable today.

Abdulla noted that Malaysian sovereign wealth fund Khazanah National Bhd issued US$500 million (US$1 = RM4.28) sukuk in August, signalling momentum in sukuk issuance for Islamic banks. “Malaysia and Indonesia became the second biggest region behind the GCC, accounting for 40 per cent of the global sukuk market,” he added. 

On the global front, Abdullah noted that global sukuk issuance in 2024 is expected to exceed 2023 levels, driven by stronger sovereign issuance activities from GCC countries.

Nevertheless, he said the global sukuk issuance is expected to slow down in the second half (2H) of 2024 after a strong issuance of US$125 billion in the first half of this year. "We are expecting a bit of slowdown in the second half, compared to the first half, but despite the slowdown, it is still going to be a very strong year overall. We are expecting a figure of between US$200 billion and US$210 billion in terms of total sukuk," he added.

-- BERNAMA