The first half of 2024 saw $91.9 billion in global sukuk issuances, a little rise of 0.87 percent year over year led by Saudi Arabian and UAE issuers.
In the first half of 2024, foreign currency issuances totaled $32.7 billion, up 23.8 percent from the same time the year before, according to the most recent report from S&P Global.
The credit rating agency noted that increased issuance of sukuk denominated in foreign currencies has been attributed to better visibility on the medium-term trajectory of interest rates.
Unlike traditional bonds, an Islamic financial certificate known as a sukuk certifies ownership of an asset and complies with Shariah law.
In order to diversify its funding sources and advance Islamic finance inside its economy, Saudi Arabia has purposefully increased the amount of sukuk it issues. This has helped the country’s infrastructure and economic growth while drawing in foreign investors looking for possibilities that adhere to Shariah.
“Stable rates, enhanced clarity on the future path of rate cuts, and high financing needs in core Islamic finance countries explain the continued increase in foreign currency-denominated issuances,” S&P Global said.
Its conclusions are in line with a recent study released by the Capital Market Authority of Saudi Arabia, which showed that the sukuk and debt capital markets in the Kingdom have grown significantly since 2019, surpassing SR30 billion and growing at a rate of 7.9 percent annually.
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