The long-term prospects for global sukuk issuance are still good despite a dramatic decline in volumes last year due to constrained global debt markets, says Standard & Poor’s Ratings Services.
“The decline in sukuk issuance in 2008 was as a result of global market turmoil, drying up of liquidity, widening of credit spreads, and investors’ wait and-see attitude,” said Mohamed Damak, a credit analyst at Standard and Poor’s, in a report on the long-term outlook for the sukuk market.
He added that part of this decline could also have been caused by comments about the Shariah compliance of some sukuk by the Accounting and Auditing Organisation for Islamic Financial Institutions.
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