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Indonesia reopens the sovereign sukuk market with a five-year deal that diversifies the country's investor base.

The value of sukuk issuance dropped by more than 56% in 2008 and S&P doesn't expect the market to revive before the second half of 2009. However, several structural factors indicate longer-term growth should be rapid.

More complex Islamic financial instruments are evolving to meet the sophisticated requirements of both issuers and investors.

The Gulf States may be diversifying risk by spending their oil riches overseas, but they are also provoking an ambivalent response from the West.