Sukuk Fever Hits Global Sovereign Issues (Editorial)

The rapid increase in the number of sovereign global Sukuks is an indication that the Islamic finance sector is taking steps to develop a more active capital market and secondary trading system. Government issued Sukuks create a short term investment market for Special Finance Houses and Islamic banks, increasing short-term liquidity. Sukuks and conventional Treasury bonds allow governments to diversify sources of funding, while also reducing the costs of such funding. The Sukuk market needs greater diversity to promote further trading and increase market depth.