Corporations Slow to Join Shariah Bond Market
Despite years of market development, pushing by Islamist governments and promotion by Shariah scholars, companies other than banks in the Middle East, have been slow to issue Shariah-compliant bonds, also known as sukuk.
The sukuk market has slowed – nine syndicated deals had been sold as of August 13, the lowest number of deals for that period since 2010, when three were completed. They raised a total of $5.7 billion, the lowest value since 2011’s $4.2 billion. The record year-to-date for issuance was 2012, when 21 deals raised $18.2 billion.
Mohamed Damak, global head of Islamic finance at credit rating agency Standard & Poor’s, said: “Some of the large issuance of last year didn’t materialise this year.”