“Standard & Poor’s”: $8 billion in sustainable sukuk issuances in 9 months

Financial Institutions Ratings Analyst at Standard & Poor’s Global, Dr. Muhammad Damak, revealed that the volume of sustainable sukuk issuances in the first nine months of 2023 has reached $8 billion.
He added in an interview with “Al Arabiya_Business” on the sidelines of a roundtable conducted by “S&P Global” in Dubai, that this number is double the volume of sukuks of the same type compared to the same period last year.
Damak explained that there is a natural compatibility between Islamic finance and sustainable finance, and there is also a similarity in green sukuks and sustainable sukuks.
He pointed out that banks operating in Islamic finance as an industry will play a role in financing the climate transition and financing the energy transition.
He explained that, given the structure of the Islamic finance industry, it is concentrated in oil-exporting countries, as many of these countries have come up with plans and strategies to improve the structure of their economy and increase the sustainability of the economy, and a portion of these projects will naturally find their way to Islamic banks in the market.
A financial institution ratings analyst at Standard & Poor’s Global said that the risks are very similar to risks in general in the capital markets in the sense that higher interest rates and risks and lower investor appetite may have an impact on the overall growth of the sukuk market.
He added that compared to the local currency, since the beginning of the year, the total volume of sukuk issuances has decreased compared to last year, which is in line with our expectations given that Saudi Arabia issued sukuk in smaller quantities in the local currency. However, when measured in foreign currency, sukuk issuances have witnessed an increase since the beginning of the year despite The interest rate rises because some exporters find an opportunity to profit from the market.