Islamic bond offerings may accelerate in the next 18 months, led by first-time issuers in Asia after the region accounted for most sukuk sold this year, Standard & Poor’s said.
While issuance of securities that comply with Shariah law are down 17 percent globally this year, Asian borrowers issued $5.3 billion, about 68 percent of the total $7.8 billion worldwide, according to data compiled by Bloomberg. Sales from companies in the Persian Gulf dropped 24 percent to $2.5 billion so far in 2010, the lowest level since 2005, after Dubai World, one of the United Arab Emirates three main state-owned business groups, announced plans to restructure debt in November.
“Sovereigns, particularly from Asia, are pushing for the revival of the sukuk market,” Mohamed Damak, Paris-based credit analyst and co-chair of the Islamic finance working group at S&P, said in an interview. “We expect additional countries, or issuers domiciled in countries new to Islamic finance to tap the sukuk market in the near future, within the next 18 months.”
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