New entrants India, Singapore boost Islamic bond sales

Aug 30 | Updated: Aug 31 2007, 05:33am hrs
Islamic bond sales from Asia will increase as newer entrants such as Singapore and India join Muslim-majority nations in issuing more of the securities, Moody's Investors Service said. Interest is growing in the rest of Asia, obviously in jurisdictions such as Indonesia and Pakistan, but also, for example, in Singapore, analyst Dominique Gribot-Carroz said in an e-mailed report.

The combined value of Islamic bonds, or sukuk, outstanding was $82.4 billion at the end of July, with 61.6% of it denominated in Malaysian ringgit and 34.5% in US dollars, the ratings firm said. India's SREI Infrastructure Finance Ltd, which invests in power, road and port projects, plans to sell $50 million of Islamic bonds this year, the first such sale from India. The Islamic bond market in India is now likely to receive a boost from the current fast pace of India's economic development and the associated need to fund new infrastructure, the report said.

Policies to promote assets that follow Muslim law are spreading as far as Europe. The UK may sell its first-ever Islamic bonds to woo oil funds from the Middle East and the Japan Bank for International Cooperation, the government's main overseas lender, is mulling a sale of as much as $300 million of the securities in Malaysia.

Bloomberg