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Friday, February 13, 2009

GCC set to see $30bn Islamic bonds issuance

by Andy Sambidge

GCC financial institutions and industrial companies are soon set to issue Islamic bonds worth $30 billion, according to Moody’s Investor Services, the ratings agency.

Companies had delayed bond issues due to general economic conditions but should move forward by mid-June this year if there is prudent government involvement and an increase in oil prices, said Faisal Hijazi, business development manager and finance analyst for Moody’s, during an interview with CNBC Arabiya.

Hijazi confirmed that Islamic bond issues fell by more than 50 percent in 2008 compared to 2007.

He pointed out that the value of bonds issued in 2008 was just over $15 billion, while in 2007 it amounted to more than $32 billion.

“Factors behind the bond issue decline were based on the global financial crisis and the lack of investor confidence in the financial markets,” Hijazi said.

He added that new standards by accounting and auditing bodies of Islamic financial institutions also raised doubts on the legality of some Islamic bonds.

Source : ArabianBusiness.com

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