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.