Several companies, especially from the Middle East, are in talks with investment banks for issuance of Islamic bonds (sukuk) in the near future with value estimated at $50 billion (Dh183.65bn), said a report. Sukuk issuances that saw a massive decline in 2008 have begun to pick up and the recently issued sukuks in the region were heavily oversubscribed.
In the Middle East, the Saudi Electric Company issued $1.86bn sukuk which was three times oversubscribed; the Central Bank of Bahrain's sukuk was eight times oversubscribed; and the $1.25bn sukuk by Abu Dhabi-based Tourism Development and Investment Company, advised upon by Clifford Chance LLP, was six times over-subscribed.

In April this year, Indonesia issued its sovereign sukuk of $650 million and was the largest dollar-denominated sukuk outside the GCC. The country aims to launch another sukuk in February next year.

The outlook for the sukuk market remains positive with Standard & Poor's indicating that the total amount of sukuk issued or being talked about in the market is estimated to be about $50bn, according to the DIFC Sukuk Guide, released yesterday.

UAE is the GCC leader in terms of sukuk issuance by value, with a total of $26.8bn from 34 issuances between 2000 and 2008 compared with $4.5bn from 89 issuances in Bahrain over the same period. In spite of being exposed to the challenges of the economic environment, its growth prospects are positive, it said. Sukuk issuances have picked up this year compared to the declining trend that was noticed in 2008, recent reports have said.