Standard & Poor's Ratings Services has published a report examining why sukuk issuance is gaining acceptance in markets beyond its established strongholds in Malaysia, Indonesia, and the Gulf Cooperation Council (GCC) region.
In our view, European banks are reducing their overseas exposure as their capital requirements have increased and their domestic economies faltered. Governments in the Middle East and Asia have therefore turned instead to local investors to back their infrastructure projects.
Banks in the Middle East and Asia that comply with Sharia law have also demonstrated a strong appetite for new assets that meet their requirements.
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