(P)GCC Sukuk Sales Fall by 32%

The sale of Islamic bonds in the Persian Gulf Arab countries fell in the first half of 2018 as increasing oil prices lessened the region’s need to plug government deficits with additional fundraising, a report said, Albawaba reported. The region saw Islamic bond—or sukuk—issuance fall by 32% to reach $16.7 billion in the first half of 2018, according to research on Tuesday from ratings agency Moody’s Investors Service. This contributed to a reduction in the Persian Gulf’s overall share of the global sukuk issuance to less than a third (30%) compared with 39% a year earlier. The (P)GCC (comprising United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait) also dragged down total global issuance which fell by 12% to reach $55 billion in the first six months of the year. The ratings agency said recovery in the oil price—which is hovering around $78.8 per barrel—has reduced pressure on the Persian Gulf Arab government’s budget deficits and helped lower their borrowing requirements.