End of sovereign issuances in Middle East could trigger sukuk boom

Author: Olly Jackson | Published: 10 Apr 2018

If the wave of sovereign bond issuances in the Middle East comes to an end, sukuk deals and investors may have to step in to close the investment gap.

A busy first quarter in issuances out of the UAE indicates that the long-awaited sukuk boom could be ready to fully emerge. Last month Emirates closed a $600 million transaction, following Dubai Islamic Bank’s own launch of a $1 billion sukuk in February. The government of Sharjah raised $1 billion in a sukuk sale last month and Dubai Aerospace plans to issue an Islamic finance instrument by mid-2018. This follows a slowdown in issuances as of the end of last year.

White & Case partner in Dubai, Debashis Dey said that if sovereign issuances come to an end, it might be time for sukuk to grow because investors may look for other investment opportunities than sovereign conventional bonds.

"People have...