The bond environment in Morocco is generally weak. The country is still preparing its first-ever dollar-denominated bond, and the yield on 4.5% euro-denominated bonds due October 2020 fell 127 basis points last week to reach 4.61%, as compared to a 139 basis point drop in the GCC. Standard & Poor’s gave the country a BBB rating, the company’s lowest investment grade rating, though it should be noted that both Tunisia and Egypt have junk ratings.
Nonetheless, the demand for sovereign sukuk issues is climbing internationally. Sukuk sales have risen 66% so far this year to reach $43.4 billion, the highest amount ever. Yields on sukuk also fell last week by 116 basis points on average to reach 2.74%, the lowest since 2009.
Several countries offered sukuk for the first time this year, including Turkey, Qatar, and Oman, while Egypt and Tunisia have laws regulating sukuk on the way.