This interestingly timed article on the sharp rise in Islamic bond issuances provoked some thought, in conjunction with the FT article Gulf pensions law promises a bonanza for fund managers from 13 August.

Although the arty has Humphrey Percy, chief executive of the Bank of London and the Middle East, London’s second biggest wholesale Islamic bank, saying “The growth of the sukuk market is a result of far greater knowledge about Islamic finance and much readier acceptance of sukuk as an investment vehicle” I rather think it's a picture that looks more like CDOs before the tires got kicked this month, insofar as Sukuks haven't been stress tested in reality.

However, the plausible deniability in modeling out their place in portfolios, given no history, the lack of clarity and funky issue of "rating" (which frankly I think the rating agencies have become so lax as to make almost fictional)... all strike me as likely to fuel a boom. Liquidity flowing off, non-transparent funds...

Here the bland note on sovereign wealth funds with a promise to speak to problems makes me think of emerging tensions between hydrocarbon liquidity flows, Islamic finance and the problem of perception - as well as outright paranoia in the West on a popular level over things Islamic link up vaguely in my head.

Well, I leave it to commentators to poke me into thinking more. Must work.