A possible rise in rated Sukuk (By IFN)

A possible rise in rated Sukuk

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GLOBAL: Ratings for Sukuk issuances are only mandatory in Malaysia, but given the steady and constant rise in Sukuk issuances since 2012, the industry might just see a change in how the rest of the industry views ratings. Global ratings agency, Fitch Ratings (Fitch) projects in its recently published report that demand will stay strong and constant for Sukuk this year, particularly for asset-based Sukuk structures. Investor confidence remains a key element in the growing popularity of Sukuk, and its sustainability in the market, and differing structures as well as legal precedent could potentially affect the current positive sentiment, Fitch predicts. However, as most issuances out of the GCC are backed by sovereign funds, many parties have not seen the necessity in issuing ratings to these papers. Fitch also expects more sovereigns to come to the market this year, including emerging markets such as Egypt, Libya, Oman and Tunisia; and has high hopes for France and South Africa, who have expressed interest in entering the Islamic issuance space. They are expected to attract strong appetite from a diverse investor base.