Islamic bonds benefit buyside and issuers but
are hard to find in western capital markets. Several things
need to be done to kickstart the global
|What’s needed to
kickstart the global sukuk market?
The central benefit of sukuk, or Islamic bonds,
is that they give issuers access to a far broader range of
investors than a conventional bond can. They perform similarly
economically to a regular bond, but their reliance on real,
tangible assets and their broader overriding principle of
sharing risk makes them a valuable piece of any smart risk
management investment portfolio.
But while there exists thriving markets for them in the
Middle East and southeast Asian Muslim countries, an absence of
western governments is marked. Aside from a few symbolic issues
by governments in the UK, South Africa, Hong Kong and
Luxembourg, domestic markets have been slow to develop.
Demand for those was strong, with...