Sukuk Beats Emerging-Market Debt for 2nd Month: Islamic Finance

Islamic bonds are outperforming emerging-market debt for a second month as new note sales rebound, Malaysia boosts spending on roads and power plants and confidence returns to the Persian Gulf.

Global Shariah-compliant notes returned 1.2 percent in December, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows, while bonds in developing regions fell 0.7 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index. Emerging-market returns have dropped as rising yields on U.S. Treasuries gave dollar-based investors less incentive to buy riskier fixed-income assets.