Sukuk issues among quasi-government companies in Saudi Arabia have become quite popular. This is leading to reasonable speculation that the kingdom itself will issue sovereign debt in the form of sukuk in 2012.
It is our opinion that the Sauds will not do this out of necessity; there is no reason for the Sauds to have to use debt instruments to fund their national operations because of their oil wealth. The Sauds will do this to set the example for other nations and to give them added credibility when the OIC (Organization for Islamic Cooperation) goes to nations such as South Africa, France, the UK, South Korea, the Philippines and others to suggest that they use the Shariah-compliant sukuk mechanism for their sovereign debt if they want access to that oil capital.
Watch this space…This will be the most common form of Islamic imperialism in the next five years.