Global sukuk issuances set for continued steady growth as Egypt prepares to enter the market: Issuances of sukuk (sharia-compliant bonds) are expected to grow 6% to around USD 130 bn in 2019, Moody’s said in a report on Tuesday. The ratings agency sees this year’s surge driven primarily by Malaysia and GCC countries, with Saudi Arabia and Malaysia having already issued USD 87 bn-worth of the bonds in 1H2019. Moody’s also said it expects to see some African sovereigns entering the market soon, noting that Egypt is preparing its regulatory environment ahead of its USD 1 bn maiden sovereign sukuk issuance, which could take place early in 2020.

Background: The government is currently in talks with Arab banks to manage its maiden USD 1 bn sovereign sukuk issuance later this fiscal year, government sources told us earlier this month. A senior government official had told us in May that the government is hoping to appoint banks by September for the issuance to take place in early 2020, after initial plans to take the issuance to market last fiscal year were shelved to give the government more time to comply with Euroclear requirements.