Business a.m.

S&P sees uncertain outlook for global #Sukuk market in 2018 as #Nigeria relishes success in first attempt

The favourable outcome of Nigeria’s first Sukuk issuance suggests that it is as a veritable financing option for the country. However, global rating agency Standard & Poor’s says its outlook for the market remains uncertain in 2018. According to S&P analysts, total issuance will likely decline to $70 billion-$80 billion in 2018 from the over $97 billion recorded in 2017. The analysts noted three main reasons for their expectations including a likely tightening in global liquidity, mounting geopolitical risks and slow progress on the standardization of Islamic products. They expect that the cost of funding for issuers will rise and that liquidity from developed markets channeled to the sukuk market will reduce. A major concern is the slow pace of standardization of Islamic finance products.

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