This article first appeared in The Edge Financial Daily, on October 21, 2015.

KUALA LUMPUR: Potential infrastructure sukuk issuance in the fourth quarter of this year is expected to shore up total issuance to between RM35 billion and RM40 billion, RAM Rating Services Bhd said, deeming it a "respectable" level given the challenging market conditions.

“While the final count on sukuk issued will still be dependent on ever-changing market conditions and sentiment, we are confident that sukuk issuances will make up 50% of private debt securities (PDS) issuances by end-2015,” its head of Islamic finance Ruslena Ramli said in a statement yesterday.

Last year, total sukuk PDS issuance amounted to RM45.5 billion, close to 50% of the RM92.1 billion of total PDS issued.

As at end-September 2015, total PDS issuance reached RM60.7 billion, of which corporate sukuk accounted for 43% or RM25.9 billion.

RAM in June revised its projected gross PDS issuance downward to RM75 billion-RM85 billion for 2015 due to mounting uncertainties that had affected market sentiment.

As at Sept 30, 2015, the total number of corporate sukuk issuances approved by the Securities Commission Malaysia stood at 21, valued at RM46.2 billion.

“Our analysis continues to indicate that the sukuk market in Malaysia will be supported by financing requirements, mainly of infrastructure projects and Islamic financial institutions,” Ruslena said.

RAM also noted that Malaysia retained its dominance over the sukuk market, with a 54% share of outstanding global sukuk as at end-August 2015.