Friday 6 February 2009

Islamic debt funds launched amid issuance doubts

A number of Dubai-based banks and asset managers are launching funds to invest in Islamic debt, hoping to capitalise on de-pressed prices and attractive yields.

Emirates NBD, Mashreq Capital and Algebra Capital - among others - have already or are in the process of raising $50m-$100m (€39m-€78m, £34m-£69m) in capital from individual and institutional investors, as regional investors are expected to eye the returns and relative safety of Islamic fixed income, or sukuk.

"Sukuk look very interesting," said Michael Samaha, managing director of business development at Morgan Stanley in Dubai. "They're trading at spreads we couldn't have envisaged a while ago."

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