HSBC said on Wednesday it has postponed the launch of its first fund investing in sukuk, or Islamic bonds, after investors were put off by a four-year lock-up period.

Investors worldwide were caught out by lengthy or sudden lock-ups imposed by investment managers during the credit crisis, which limited access to much-needed cash.

The sukuk market boomed in 2007, reaching $33.1 billion, but slowed down in 2008, hit by the financial crisis.

Meanwhile, Kuwaiti firm Investment Dar in May defaulted on a $100 million Islamic debt issue, the first such default for a major, public Islamic instrument in the region.

These facts and events demonstrate unequivocally that Islamic finance has NOT escaped the impact of the global economic slowdown…


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