Sukuk market needs time to turn around

Noor Islamic Bank does not expect the Islamic bond market to turn around for another three years, given the financial and political uncertainty in the region, its chief executive said Wednesday. "What you see in the sukuk market right now is not growing but I think it is shrinking a little bit in comparison to years before," Hussain Al Qemzi told Reuters in an interview. "I see three years before we see an upward trend in sukuk. We will see a stronger comeback afterwards." Issuance of Islamic bonds, or sukuk, all but dried up as the global financial crisis and then regional political upheaval sapped interest in the market. Recent sukuk issuances out of the Gulf from companies such as Sharjah Islamic Bank and HSBC Middle East were oversubscribed and raised some hope that Islamic bonds were poised for a revival. Al Qemzi said Noor Islamic has no plans to issue any sukuk in the near term but is mandated on a few deals, including one for Turkey's Bank Asya , one of four fully Islamic banks in the country. "The market remains very cautious, and within the GCC [Gulf Cooperation Council], there is still some reluctance," he said. "But we are hopeful of concluding one or two sukuk deals this year." Article continues below Noor Islamic is partially owned by Dubai Investment Group, which is the investment arm of Dubai Holding, along with Investment Corporation of Dubai, the Emirates Investment Authority and Noor Investment Group.