longterm-sukuk-outlook-promising-after-weak-2008

Long-term sukuk outlook promising after weak 2008

The value of sukuk issuance dropped by more than 56% in 2008 and S&P doesn't expect the market to revive before the second half of 2009. However, several structural factors indicate longer-term growth should be rapid.
The market for Islamic bonds, or sukuk, declined sharply in 2008 as a result of global market turmoil, drying up of liquidity, widening of credit spreads, and a wait-and-see attitude among investors. Although difficult to measure, part of this decline could also have been due to comments about the Shar'iah compliance of some sukuk by the Accounting and Auditing Organisation for Islamic Financial Institutions.

Standard Poor's considers that long-term prospects for the sukuk market remain strong, however. Although volumes dropped dramatically in 2008 down more than 56%, the market attracted about the same number of issuers as the year before. Conservative estimates of the pipeline of sukuk that have been talked about or...
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