Slowdown in sukuk issuance, yields come down
The strong demand for Islamic debt papers by foreigners appears to be reaching a plateau. According to analysts, the demand for Islamic bond papers from foreign investors in the last one year has pushed up prices and subsequently the yields have come down. Standard & Poor’s (S&P) Ratings Services foresees the global sukuk market heading towards a correction in 2015 after Bank Negara stopped issuing the bond earlier this year. Bank Negara’s move leaves the door open to issuers such as the International Islamic Liquidity Management Corp and the Islamic Development Bank to step up their issuance and provide the industry with liquidity, thereby contributing to the development of an Islamic yield curve.
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