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Growth In Sukuk Issuance Offers Islamic Funds An Opportunity, Says Report

LONDON: In a report published today, Standard & Poor's Ratings Services said that it believes that the sukuk market has grown large enough to support a transformation in the Islamic fund industry (see "Sukuk Funds Poised To Grow As Sukuk Market Continues To Expand").

The sukuk market returned to growth in the first half of 2010. Global sukuk issuance topped $13.7 billion during this period, nearly twice the $7.1 billion recorded during the same period last year. In our view, the slight improvement in market conditions since the significant slowdown in 2008 has contributed to this performance.

"Sukuk funds are increasingly popular among investors as they produce fixed-income returns similar to those from traditional fixed-income investment products," said Standard & Poor's credit analyst Samira Mensah. "Sukuk funds also help investors to diversify away from pure equity and real estate funds, which suffered heavily during the last credit cycle."

Ms. Mensah commented: "The expansion of the sukuk funds industry will, in our opinion, go hand in hand with the growth of the sukuk market, which continues to face obstacles. We believe the success of efforts by governments and other market participants to remove those obstacles will shape the direction the sukuk market and funds industry will take in the future."

The report is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Alternatively, call one of the following Standard & Poor's numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow (7)
495-783-4011.
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Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com

Analyst contacts:
Samira Mensah, London
Emmanuel Volland, Paris

Media contact:
Matthew McAdam, London
Tel: +44 (0) 207 176 3605
matthew_mcadam@standardandpoors.com

Press Office Contacts:
London: +44 20 7176 3605
Paris: +33 1 44 20 6740
Frankfurt: +49 69 33999 225
Milan: +39 02 72 111 245
Madrid: +34 91 389 6944
Moscow: +7 495 783 4011
Stockholm: +46 8 440 5914

© Press Release 2010

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