Sukuk shipping bonds surging

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SUKUK, the version of Islamic bonds favoured by LNG operator MISC and other leading Malaysian shipping companies, will exceed $200Bn in total value worldwide by 2010, a banking authority has predicted. The governor of Malaysia’s central bank Tan Sri, Zeti Akhtar Aziz, told a Boston seminar that the global sukuk market's global total value has already surpassed $100Bn, the Bernama News Agency reported. “The growth is spurred in part by the growing funding requirements in emerging market economies, in particular in Asia and the Middle East,” she told delegates to the seminar ‘Islamic Finance: A Global Growth Opportunity Amidst a Challenging Environment’. Aziz encouraged the shipping sector to explore alternative ways of financing during today’s financial turmoil. “The global financial crisis has had limited direct impact on Islamic finance,” declared Aziz, who added that total assets being managed by Islamic banks and conventional banks offering Islamic banking services now purportedly exceed $500Bn. Sukuk-administered repayments do not include interest and are instead benchmarked on an asset-based premise, so lenders pay a fixed repayment amount.