The Islamic bond market, which trades finance instruments based on ownership- and profit-sharing arrangements designed to comply with Muslim religious limits on charging interest, is in disarray, reports Bloomberg: “The so-called sukuk market, which has doubled each year since 2004 and grown to $90 billion, is declining after a Bahrain-based group of Islamic scholars decreed in February that most (sukuk) bonds ran afoul of religious rules.” Islamic bond prices have dropped, sales have fallen by half, and borrowing costs have risen “on projects including $200 billion of real-estate developments in the United Arab Emirates capital.” Story here.
That’s led to predictions, for example by Morgan Stanley, that construction in Arabic-speaking countries, one of the few bright spots in the world at the moment, will slow soon. But worldwide construction-manager Hill International of Mount Laurel sees no sign of that so far. Hill, which has grown rapidly from jobs in the Emirates, Saudi Arabia, Kuwait, Qatar, Egypt and other predominantly Muslim countries, has “not seen any effect in the pace of contracts, and we have not lost work because any of our clients have had to pull back financing,” said spokesman Scott Paolin. Also, Hill is “picking up work in other emerging areas,” including India.
continue reading at…………… http://www.guardian.co.uk/world/2008/oct/23/religion-islam