How to set sukuk free

Author: | Published: 1 Dec 2007

Demand for sukuk has been strong in recent years. The boom in oil prices has delivered a cash windfall for Middle Eastern investors at a time when they are becoming more meticulous in applying religious principles to their investments. Since its birth in 2002, the sukuk market has grown remarkably. Standard & Poor's recently estimated that the global market is worth over $80 billion.

The sukuk market is expected to continue to grow, as more businesses seek to tap the liquid petrodollars and the demand for shariah-compliant products. From an investor's perspective, sukuk are emerging as a notable asset class. In addition, non-Muslims who already own conventional bonds may see the acquisition of sukuk as introducing a new asset class into their investment strategy, one that brings diversity to their portfolio. In the past, most sukuk issues have been oversubscribed, showing the high demand from investors. But even though the...