The global issuance of Sharia-complaint foreign and local currency bonds this year is expected to reach as much as $115 billion (Dh422.1bn), the same level of 2018, with oil prices being a determining factor of total size of sales, according to S&P Global Ratings. The total sukuk issuance from the six-member economic bloc of GCC is expected to climb to $47.6bn, slightly higher than $46bn achieved in 2018, with Saudi Arabia leading the sovereign issuers from the region, S&P said on Tuesday. The UAE, the second-biggest GCC economy, may sell $8bn worth of sukuk in 2019, slightly lower than $9.1bn recorded at the end of 2018, with private sector corporations dominating the issuance in the country this year. S&P has developed “optimistic” and “pessimistic” growth scenarios for the global sukuk market in 2019 due to the heightened uncertainty this year in the wake of the global liquidity squeeze, the US Federal Reserve's gradual interest rates increases, and higher cost of funding for issuers. Geopolitical uncertainties will also be a factor in how investors perceive the risk in buying regional sukuk, with the oil price remaining the biggest factor influencing financing needs and the ultimate volume of paper sold from the hydrocarbon-dependent economies of the GCC, S&P noted. Under its optimistic scenario, S&P estimates the total sale of global sukuk to reach $115bn. The foreign currency issuance could range between $32bn and $28bn, in optimistic and pessimistic growth scenarios, respectively, against $30bn recorded at the end of 2018. “If we are to see higher oil prices, GCC countries will have lower financing needs [and vice-versa]. Oil prices will be the key to how sukuk markets performs,” Mohammed Damak, senior director and global head of Islamic finance at S&P told reporters in Dubai. “Saudi Arabia [within the GCC] will be the biggest sukuk issuer in both optimistic and pessimistic scenarios.” AFP.