Global Bond News

Qatar Islamic Bank SAQ, the Gulf state’s biggest bank complying with Muslim banking rules, bought 1.25 billion riyals ($344 million) of Islamic bonds offered by the government.

Saudi Arabia and Malaysia will lead sales of Islamic bonds in the “foreseeable future,” as the two nations raise funds to finance their infrastructure projects, said Tariq Al Rifai, director of Islamic market indexes at Dow Jones Indexes.

Foreign investors have given Malaysia a thumping vote of confidence via the largest US dollar sovereign sukuk to date, which attracted the attention of some 270 investors from around the world.

The term “sukuk bond” is a slightly odd one. Bonds are usually associated with interest payments. Sukuk refers to a financial instrument that complies with Islamic investment principles, which prohibit interest payments.

The U.K. government, facing the deepest recession since the 1980s, is unlikely to sell its first Islamic bonds over the next 12 months, according to BMB Group Ltd., which advises on structuring of Islamic products.

State-owned Islamic Bank of Thailand will issue the country’s first Islamic bond in a plan to raise funds for expansion, its president said on Friday.

Indonesia may sell as much as $500 million in its first sale of global Islamic bonds, the central bank’s deputy governor, Hartadi Sarwono, said on Thursday in Singapore.

The global market for sukuk issuance fell by 54.5 per cent in 2008 according to a new report.

Even as recession tightens its grip on the world, some optimists remain. For example, Dubai’s Emaar, a developer in need of fresh financing, has said it is looking to raise $2bn in Islamic bonds, or sukuk, in 2009.