Sunday, 28 October 2012

Sukuk issues by GCC governments hit record levels

MANAMA: Sukuk issuances by GCC governments have reached record levels this year, on the back of positive regional economic developments.
Sound liquidity in regional financial systems, a strong local appetite for debt as well as accommodative worldwide monetary policies, is responsible for the trend, according to a report by credit ratings agency Standard & Poor's.
"As access to capital markets widened, several corporate issuers in the region were able to successfully refinance large amounts of debt falling due, notably by tapping the sukuk market," said credit analyst Tommy Trask.
"We also expect the project finance sector, including real estate and transport projects, to increasingly rely on sukuk issuance to fund transactions," said analyst Karim Nassif.
Overall, rising oil prices have led Standard & Poor's Ratings Services' economists to revise their gross domestic product growth forecast for the GCC for this year to five per cent from 4pc previously, and created a fertile environment for credit growth, particularly in the Gulf's oil-exporting economies.
(Gulf Daily News / 28 Oct 2012)

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