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Sukuk Perceptions and Forecast Study 2022: Navigating a New Environment

Sukuk markets face a mixed outlook for 2022 as global economic risks unfold. Find out how and why.

Global sukuk issuance reached $100.9 billion in H1 2022, however issuance momentum is slowing as the Fed leads a global monetary tightening cycle and elevated oil prices reduce government borrowing.

Refinitiv’s Sukuk Perceptions and Forecast Study 2022 provides an overview of the sukuk primary and secondary markets, highlighting the impact of recent economic and geopolitical developments that followed the relaxing of Covid-19 restrictions. Additionally, projections for sukuk issuance, market size and supply-demand gap are presented through Refinitiv’s proprietary Sukuk Supply and Demand Model.

The report also features the findings of the Refinitiv’s 2022 Sukuk Survey, shedding light on market perceptions of future growth, trends and continuing challenges facing both sukuk issuers and investors. 50% of respondents said that they are increasing the sukuk allocation in their Shariah-compliant investment portfolios in 2022, in light of ongoing economic developments. Over 50% of survey respondents cited strong demand for sukuk and diversifying sources of funding as important reasons for new sovereign issuers to tap the sukuk market. Meanwhile, 41% of respondents indicated they were still bullish about growth in global sukuk supply, expecting issuance to reach $180 billion or more in 2022.

Access the full report to find out more about:

  • Up-to-date statistics and projections on global primary and secondary sukuk markets
  • Recent developments and emerging trends in the sukuk market
  • Various market players’ perception of prospects and challenges for sukuk

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As 2022 got underway, new global risks emerged that would introduce a new economic environment that is shifting sukuk market dynamics and leaving the near-term outlook uncertain. This is uncharted territory for a mature sukuk market.

Key content

Secondary market performance

Sukuk fared better than emerging market bonds in the secondary market, supported by a boom in oil prices and a limited exposure to the Ukraine conflict.

International markets

International sukuk issuance slowed by 10% YoY in H1 2022 as a stronger dollar drove issuers to concentrate their borrowing in domestic markets. Meanwhile, 52% of survey respondents observed an increase in liquidity in domestic sukuk markets in the past five years.

Sukuk outlook

Global sukuk issuance is projected to settle at $185 billion in 2022, further growing to $257 billion in 2027. The sukuk supply-demand gap is projected to narrow to $81.4 billion in 2022 and eventually expand to $101.4 billion by 2027.