S&P Global’s latest report anticipates a surge in global Sukuk issuance between $160 billion and $170 billion in 2024, attributing the increase to heightened financing needs in key Islamic finance countries. The report highlights the steady momentum in the sector, bolstered by improved global liquidity conditions.
Despite a 6.1% decline in global Sukuk issuance to $168.4 billion in 2023, compared to the previous year, challenges in Saudi Arabia’s banking system and Indonesia’s reduced fiscal deficit were cited as contributing factors. However, the dip in 2023 was partially offset by a rise in foreign currency-denominated Shariah-compliant bonds.
S&P Global underscores the potential impact of digitalization on streamlining Sukuk issuance, emphasizing the need for standardized legal documents and Shariah interpretation. The report also projects an increase in sustainable Shariah-compliant bond volumes in 2024, influenced by the success of the UN Climate Change Conference held in Dubai last year.
The report suggests that sustainable Sukuk will play a pivotal role in expanding Sukuk issuance, particularly in light of the recent COP28 in the UAE, which emphasized the significance of Islamic finance and Sukuk in addressing climate change.
A recent announcement revealed that Saudi Arabia’s National Debt Management Center (NDMC) is set to launch a Sukuk savings program to further develop the local market. Hani Al-Medaini, CEO of NDMC, outlined plans to integrate riyal-denominated Sukuk into global indices with the assistance of the Capital Market Authority, aiming to enhance liquidity in the domestic market.