Defaults to bring sukuk shake-up

Until the Kuwaiti firm Investment Dar said it had defaulted on a US$100 million (Dh367.2m) Islamic bond, the sukuk market had been largely untested.

The market has had strong growth over the past seven years, with the value of sukuk issued rising from nothing in 2002 to an estimated $90 billion today.

Before the default by Investment Dar, which owns half of Aston Martin Lagonda, no issuer had ever publicly failed to make good on its obligations. But that is changing fast as the financial crisis batters the economies of countries in the Gulf and South East Asia where sukuk have been most popular.