Despite the significant volume decline seen in 2008, the long-term perspectives for global sukuk issuance are still good, said Standard & Poor's in a report called Sukuk Market Declined Sharply In 2008, But Long-Term Prospects Remain Strong.

"The decline in sukuk issuance in 2008 was as a result of global market turmoil, drying up of liquidity, widening of credit spreads, and investors' wait-and-see attitude," said S&P credit analyst Mohamed Damak. He added that even though it is hard to measure, part of this drop could also have been due to comments about the Sharia compliance of some sukuk made by the Accounting and Auditing Organization for Islamic Financial Institutions.

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