Demand for Islamic bonds has grown substantially but still lags behind mainstream debt markets. They operate within the rules and principles of Islamic law (shari'a) and presently remain markets where investors hold bonds to maturity. Islamic bonds have gained universal acceptance as a viable alternative to conventional products. Aside from the obvious attractiveness among Muslim investors, Islamic bonds may also appeal to conventional investors looking for attractively-priced instruments for regular income and capital gains. The strong investor demand offers issuers access to an alternative cost effective fundraising option. Moreover, efficient price discovery processes for Islamic securities in some countries-for example, the issuance of Islamic Treasury Bills and Government Issues in Malaysia-has led to the establishment of an Islamic benchmark yield curve.
An alphabetical list of terms with definitions about the bond market.