Global sales of Islamic bonds are forecast to rise nearly 60 percent this year to more than $22 billion as economic recoveries and high crude oil prices revive the market, a Reuters quarterly poll showed.
An upswing in corporate spending, an increase in issuers seeking to diversify their sources of funding and improving investor sentiment in the Gulf are also expected to fuel fund-raising activities, according to the 15 respondents surveyed.
Issuance fell 26 percent to $14 billion in 2010 in the aftermath of Dubai's debt restructuring and high profile sukuk defaults that exposed legal uncertainties surrounding these instruments, according to Thomson Reuters data.
That estimate excludes issues which are callable under a year, those which are not rank eligible or underwritten and self-funded ineligible issues.
"On the part of financial institutions, they will need to strengthen their balance sheets. Corporates will need funding for expansion," said Simon Eedle, Credit Agricole CIB's Islamic finance head.
"Sovereigns will push sukuk as part of fulfilling their national agenda."
Qatar Islamic Bank and National Bank of Abu Dhabi have launched sukuk sales in recent months, with the Dubai government, Saudi Arabia's civil aviation authority, Gulf Investment Corp and Saudi International Petrochemical Co are expected to tap the market too. But some experts have said global issuance of Islamic bonds would take another year to fully recover with new markets in Europe and Asia yet to offset the fall in Gulf issuance.
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