S&P expects issuance volumes of sukuk to fall by 12.5% YoY in 2022 to $130bn. It is also a downward revision to its initial forecast of $145bn. This comes on the back of higher oil prices which has led to “reducing financing needs” for sukuk issuers thanks to improving balance sheets of some leading players, S&P notes. It also added that Sharia scholars’ preference for a higher proportion of profit and loss sharing may make sukuk an equity-like instrument, and reduce investor and issuer appetite. In June, UAE issuances remained flat while it was slightly higher in Bahrain and Turkey. Declining issuances were seen in Saudi Arabia, Kuwait, Malaysia and Indonesia.
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