Saudi Arabia to become destination for pharmaceutical sector: Fitch Solutions

Saudi Arabia to become destination for pharmaceutical sector: Fitch Solutions
Saudi Arabia to become destination for pharmaceutical sector: Fitch Solutions

Thank you for reading the news about Saudi Arabia to become destination for pharmaceutical sector: Fitch Solutions and now with the details

Jeddah - Yasmine El Tohamy - RIYADH: Global sukuk issuance experienced a 9 percent increase in the first half of 2023, largely driven by Saudi Arabia and several emerging issuers, according to credit agency S&P Global.

In its report “The Global Sukuk Market Is Showing Pockets of Opportunity,” the agency attributed the surge to features exclusive to specific core Islamic finance markets, like the Kingdom. 

“In Saudi Arabia, for example, reduced banking system liquidity and lower oil prices meant a decline in sovereign local currency sukuk but higher foreign currency-denominated issuances,” noted the report.  

Global sukuk issuance will exceed its initial estimate of $150 billion and hit $160-$170 billion in 2023, added the agency.  

However, as local currency issuance drops, it will still fall slightly below global sukuk issuance recorded in 2022.

The geographic concentration of sukuk activity in the market has garnered attention, according to the agency’s credit analyst Mohamed Damak.

Damak suggested that in order to attract the interest of non-core jurisdictions, the industry might need to reevaluate its issuance process and strive for greater harmonization of Shariah standards. 

Despite the market anticipating an increase in foreign currency activity, the total amount of sukuk issued this year is likely to be lower than the levels recorded in 2022 or 2021.

S&P Global anticipates greater use of the financial instrument as issuers become more conscious of environmental, social, and governance issues. 

Damak stated: “We also see continued growth of sustainability-linked sukuk and expect this year’s COP28 in the UAE will likely shed more light on how Islamic finance and sukuk might help address the challenges of climate transition.” 

In April, US-based Fitch Ratings reported that the global sukuk outlook for the second quarter of 2023 remained positive, despite short-term uncertainties arising from ongoing macro volatilities.

“Islamic investors’ liquidity and investment appetite continues to be supportive of the longer-term sukuk story,” said Bashar Al-Natoor, the global head of Islamic finance at Fitch Ratings, in its global outlook report.  

The sukuk issuance business experienced an 18.5 percent decline in the first quarter of 2023, amounting to $45.3 billion, compared to the same period in the previous year. This decrease can be attributed to market volatilities and lackluster investor interest.

“Persistent macro volatilities and uncertainties, contraction in global liquidity and investor risk appetite, and monetary tightening is affecting sukuk and bond issuance in regions where Islamic finance is active,” added Al-Natoor.  

This was mainly attributed to the surge in crude oil prices, reducing new financing needs for many oil-exporting sovereigns.  

However, Malaysia, Bahrain, and several core oil-importing countries still have funding needs and are expected to have budget deficits in 2023.  

These were the details of the news Saudi Arabia to become destination for pharmaceutical sector: Fitch Solutions for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at Arab News and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV PIF’s Neo Space Group, SES partner to revolutionize inflight connectivity
NEXT WEF warns of political risk, says global economy is brightening

Author Information

I am Joshua Kelly and I focus on breaking news stories and ensuring we (“Al-KhaleejToday.NET”) offer timely reporting on some of the most recent stories released through market wires about “Services” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Al-KhaleejToday.NET specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 838 Emily Drive Hampton, SC 29924, USA Phone: (+1) 803-887-5567 Email: [email protected]