The value of Islamic sukuk bonds dropped sharply last year after Malaysia stopped issuing them and as oil prices continued their fall, the Standard & Poor's rating agency said Wednesday. The trend is expected to continue in 2016 as the main countries using the Islamic form of debt, especially in the Gulf, are switching to conventional bonds, an S&P report said.
It said sukuk worth $63.5 billion (59 billion euros) were issued in 2015 compared with $116.4 billion in the previous year, a 45.4 percent decline.
The drop was largely due to Malaysia's central bank, one of the largest global providers of the product, which stopped issuing sukuk.
It issued $50 billion of sukuk alone in 2014. Were Malaysia removed from calculations, sukuk would have dropped just 5 percent in 2015, S&P said.
The rating agency forecasts that sukuk issuance will drop to between $50 billion and $55 billion this year, a decline of 13-21 percent.