'Excellent future' for Mena Islamic bonds, says NBAD

The future of Islamic bonds in the Middle East and North Africa (Mena) seems "excellent" in the medium-to-long term, but lack of supply and right price is "stifling" demand and liquidity in the market, according to NBAD. Finding that oil prices will be a key determinant of sukuk returns in 2016, NBAD said the uncertainty over the likely trajectory in the US interest rates, the bear market in oil, and increasing fiscal concerns across the region all contributed to a bearish tone in the market, causing many issuers to remain on the sidelines. Although GCC sukuk investors remain natural buyers, they have tightened their credit quality criteria, and become much more price sensitive.