Gulf Banks’ Debt Poised for Record Yearly Gain: Islamic Finance

Islamic bonds issued by financial services companies in the Persian Gulf are heading for their best year on record on prospects of debt restructuring and demand for higher-yielding assets in emerging markets.

Shariah-compliant debt from financial institutions in the six-nation Gulf Cooperation Council returned 15.7 percent so far in 2010, HSBC/NASDAQ Dubai GCC Financial Services US Dollar Sukuk Index shows, the most since HSBC started tracking their performance in July 2005. DIFC Investments LLC’s floating-rate note maturing in June 2012 gained 33 percent in price terms to 82.75 cents on the dollar, Bloomberg data show. The 3.172 percent sukuk due September 2014 sold by Islamic Development Bank, a Jeddah-based multilateral lender, returned 9.9 percent, prices provided by Royal Bank of Scotland Group Plc show.