UAE: Islamic bonds from the GCC posted the highest returns in nine months due to successful debt restructurings of Dubai’s state-controlled companies Dubai World and Nakheel as well as the lack of Sukuk issuances in the region.
GCC Sukuk returned 3.6% in the second quarter this year, the most since the third quarter of 2010, according to HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index.
According to the index, average yields on Sukuk in the GCC declined by 105 basis points in the second quarter to 4.23% on the 30th June. This marks the biggest quarterly decline since the end of the third quarter of 2010.
The rate dropped eight basis points to 4.16% on the 1st July. The spread between the Islamic papers and the Libor narrowed to 242 basis points, the lowest in three years.
DP World’s 6.25% Sukuk due July 2017 led the gains, rising by 5.9% in the second quarter. Dubai’s Sukuk rallied 3.3%.