Islamic bonds gained at half the pace of emerging-market debt in July. Fund managers say they may make up the lost ground as funds flow into developing nations and Dubai Worldrestructures debt.
“As sentiment toward emerging markets improves globally and default risks wane, Islamic debt will stand to benefit,” said Usman Ahmed, a senior fund manager in Dubai at Emirates NBD Asset Management, which manages $300 million of bonds at the unit of the United Arab Emirates’ biggest lender. “The sukuk market is benefitting from the increased demand, and improved earnings at some of the biggest issuers.”
Global bonds that comply with Shariah law gained 2.1 percent, double the return in June and the most since a 4.1 percent advance in March, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. JPMorgan Chase & Co.’s EMBI Global Diversified Index, which tracks debt from 46 emerging-market countries, climbed 3.9 percent."
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