The yields that are offered in the investment in the Islamic bonds are so high that investors globally, are taking huge risks of investing here and spreading the risks of returns. According to an eminent spokesperson, they are expecting to see a pre-crisis level of international as well as regional interest in investing in the Islamic debt market by the third quarter of the year 2011.
The average yield on sukuk that were sold by the issuers of one of the ace stock holding institutions rose to 20 basis points or 0.2% points last week to 5.8%. The global sales of sukuk have declined to a percentage of 24 this year to $12 billion after reaching an
alarming level of $31 billion in the year 2008. This statistics was taken just before the financial crunch in the markets that drove all the investors away from all but the safer government securities, according to a data.
The bond sales in compliance with the Shariah is also increasing in the Persian Gulf after a state holding company signed a deal with 99% of the creditors to change the terms and conditions on $24.9 billion on debt. The economic growth in the North Africa and the
Middle East will escalate to a 5% in 2011 from a 3.8% in the year 2010 and a 1.1% in the year 2009, as surveyed by the International Monetary Fund.
Companies in the Gulf countries that deal with sukuk bonds have already sold $1.25 billion of sukuk bonds since the economic crunch in Dubai. This year’ s total was an amount of $3.7 billion. Institutions like Islamic Development Bank sold $500 million of five year term sukuk on the 20th of October that has yielded 40 basis points. Another Shariah complaint lender sold $750 million of similar sukuk bonds on the 30th of September and has also received orders of $6 billion.
According to a Bahrain based Islamic unit, a trend is seen that supports the fact the liquidity in the Islamic bank market should return. This would contribute to the increase in the popularity of the Islamic bond market.
Rose Anderson is a financial writer. She is the Community Member of "Debt Community" and has been contributing her suggestions to the Community. She has also made notable contributions through various articles written on different subjects related to the debt industry.
