Home » wire - Malaysia, Abu Dhabi lead dollar sukuk rally

25/07/2011 02:26:49 PM GMT   Comments ()     Add a comment   Print     E-mail to friend

 [] Investment-grade bonds in Malaysia and Abu Dhabi are leading a rally in dollar sukuk, driving average yields to the lowest level in six years, as rising prices of commodities shore up economic growth. The yield on Malaysia's 4.646 pct note maturing in July 2021 dropped 26 bps, this month to 4.4 pct yesterday, according to prices from Royal Bank of Scotland Group. The rate on the Abu Dhabi-backed Tourism Development & Investment Co's 4.949 pct debt due in October 2014 fell 21 bps since June 30 to a 1 1/2-month low of 2.81 pct, data compiled by Bloomberg show. Increasing prices of crude, palm oil and soybeans are spurring gains in Sharia-compliant bonds even as the extra yield investors demand to hold emerging-market securities over US Treasuries widened this month. Sukuk from commodity-producing countries like Malaysia and Abu Dhabi will benefit because the higher commodity prices will increase gross domestic product and reserves. Investment-grade sukuk give comfort that the issuer won't default. In the current environment, people want that said a fund manager. omar1.1

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