Islamic Bond Decree Cripples Sukuk, Imperils Projects
Sept. 3 (Bloomberg) -- The fastest-growing part of the global bond market is faltering, and it has nothing to do with subprime mortgages or the credit crunch.
Sales of Shariah-compliant debt, which financed Dubai's Palm development, the world's largest man-made island and where David Beckham and Donald Trump have homes, fell 50 percent in 2008 and prices dropped an average 1.51 percent, according to HSBC Holdings Plc index data.
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 bonds ran afoul of religious rules. Only one that complies with the edict has been issued, pushing up borrowing costs on projects including $200 billion of real-estate developments in the United Arab Emirates capital....
Clarence Sexton | 8/31/2009
