Global sukuk issuances continued trending lower by 16% y-o-y to USD77.11 bil as at end-June 2022 (end-June 2021: USD91.35 bil). Central banks in 1H2022 have started or are raising their policy rates after consecutive rate cuts during the pandemic. As a result, the drop in issuances was mainly led by reduced corporate issuances in response to the rising interest rate environment. Global sukuk markets saw a decline in corporate issuances across most countries, with Malaysian and Saudi Arabian issuances experiencing the steepest decline.
Sovereign issuances stayed mostly level with only a marginal decline of 2% y-o-y in 1H2022, supported by government funding needs to mitigate the impact of rising inflation. Sovereign issuances also continued to form the bulk of global sukuk issuances at 64% as at end-June 2022. Malaysia reclaimed its leading position as the largest sukuk issuer in 2Q 2022 after the GCC market overtook its position for the last three quarters, with a total issuance of USD17.6 bil (+28% y-o-y). This was mainly due to the soaring crude oil prices, which reduced the funding needs of GCC governments.
