Sukuk issues have outpaced conventional bond issues for the second year in a row, according to law firm Trowers & Hamlins, which compiled the data.

The value of conventional bonds rose slightly, from $11.1bn in 2006/07 to $11.2bn in the past year.

Western institutions now account for about 60 per cent of take-up of sukuk.

The average tenor of sukuk issued during the past year was 7.4 years, up from 6 years in 2006/2007 and 4.8 years in 2005/2006.

Some 38 per cent of sukuk were issued by real estate firms, significantly down on the 60 per cent figure from a year earlier. The proportion issued by the oil and gas companies doubled to 12.5 per cent, while 25 per cent of all sukuk were issued by financial services companies. The value of sukuk has risen from just $964m in 2002/03.

“Appetite for Islamic debt has been remarkably resilient to the credit crunch and shows just how low-risk investing in Gulf corporates is now seen by Western institutions,” says Neale Downes, partner at Trowers & Hamlins.