PETALING JAYA: Moody’s Investors Service expects global sukuk issuance to decline for a third consecutive year in 2023, after peaking at US$205bil in 2020, despite an anticipated rebound in the second half of this year (2H23).

       The global rating agency anticipated global sukuk issuance for 2023 will range between US$150bil and US$160bil, down from US$178bil in 2022.

       “We expect sukuk issuance to continue to decline this year on lower volumes from major sovereign issuers, mostly reflecting an improving fiscal position across the Gulf Cooperation Council (GCC) countries and South-East Asia,” it said in a report.

       Nevertheless, the rating agency expresses optimism for a resurgence in sukuk issuance in 2H23.

       Moody’s foresees a stronger sukuk issuance pipeline of US$80bil to US$90bil in 2H23, driven by its expectation of higher sovereign volumes in South-East Asia and Turkiye, as well as sustained strong volumes from corporates and financial institutions.

       “GCC sovereigns could also surprise to the upside if stabilising market conditions create windows of opportunity to refinance or pre-finance upcoming maturities,” it said.