IslamicFinance.de

The investment banking arm of Saudi Arabia’s Al Rajhi Bank has received regulatory approval for its first mutual fund that will invest in sukuk. Interestingly, Al Rajhi has never raised money through a sukuk issue itself. The fund, in the pipeline since 2012, has reportedlly been prompted by a growing number of client inquiries about investing in sukuk. Sukuk issuance in Saudi Arabia rose to the equivalent of $15.2 billion through 20 deals last year, compared to $11.2 billion through 18 deals in 2012. However, a number of the kingdom’s sharia scholars view trading in sukuk as outright trading of debt, which is banned by Islamic principles.