Sukuk attracts cash-rich banks

With debt markets gingerly reopening, Gulf companies eager to raise cash through issuing bonds have to make a decision: should they issue conventional or Islamic bonds, known as sukuk?

The SR7bn ($1.9bn) sukuk issued by Saudi Electricity Company, the kingdom’s state power utility, this summer could be a useful indicator.

Investors flocked to it, rewarding the company with a price of 160 basis points above the Saudi interbank offered rate.