CFA Institute Financial NewsBrief | 09/03/2008

The market for Islamic bonds grew to $90 billion during the past few years, but a decree from a group of Islamic scholars saying that most of the bonds do not follow religious rules sent the market into decline. Sales of sukuk bonds dropped 50% this year, and prices fell an average of 1.51%, according to index data from HSBC. “The sukuk market is clouded by considerable uncertainty and nervousness,” said Chavan Bhogaita, head of credit research at the Middle East unit of HSBC. “Spreads have been widening, sukuk have been underperforming conventional bonds and investors have been shying away.” Bloomberg (09/03)

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