News
Sukuk Demand Expected To Drop In 2010
| February 21, 2010 by Rob Morris
Experts believe global sukuk issuance will fail to reach 2009 levels.
Global sukuk issurance is expected to fall below 2009 levels as rising borrowing costs and the Dubai debt crisis hit market sentiment, a recent poll has claimed.
Of the 12 Islamic bankers and industry experts questioned by Reuters, most believed last October’s estimate in a similar poll, which claimed issuance would exceed US$20 billion in sales this year, was optimistic. They said the figure for 2010 would more likely be between $15 billion and $17 billion.
Data provided by Thomson Reuters estimated that global sukuk issuance totalled $19 billion in 2009.
Another forecast, this time from Commerzbank, set global emerging market issuance at nearly $200 billion last year. Investors searching for higher-yielding assets would help the market reach or even succeed that figure again in 2010.
Sukuk sales from emerging markets would be driven by infrastructure funding and government borrowing, irrespective of the trading environment and potential rise in defaults, it was claimed.
