Islamic bonds dip amid fears of US Fed scaling back
INVESTORS in Islamic bonds are losing money for the first time in more than three years amid concerns the US Federal Reserve will scale back its bond-buying programme.
Sukuk – funds that are compliant with Sharia law – have experienced their first decline since 2009. Sukuk investors had been benefiting from a boom in Islamic finance, with Ernst & Young forecasting a surge to $1.8trn this year from $1.3bn in 2011.
"We went from a world where there was abundant liquidity to all liquidity evaporating," said investment banker Gus Chehayeb.