The recent surge in demand for Shariah compliant instruments alongside the launch of Dow Jones City group Sukuk Index in 2006 has further catalyzed the increase in the number of issuance of global Islamic Sukuk. Saudi Arabia, UAE and Qatar have become major issuers of global Sukuk which are highly demanded by investors. The normal rationale given behind such behavior might be the religious commitments to involve in riba free investments. However, it is worth testing that is it only religious commitments that are driving the demand or there may be some other factors contributing to this surge. Realizing that the majority of global Sukuk issuance is from the oil exporter countries, one such factor could be the price of crude oil. The relationship between crude oil prices and global Sukuk Index is not much covered in the literature as the facility has just started gaining attention in global capital markets. Insufficient data and the lack of reliable benchmarks for global Islamic Sukuk performances add further to the difficulties. While being impaired by such limits, this study will attempt to find out the possibility of any impact of oil prices on the global Sukuk returns and hence their issuance. The aims are achieved using advanced wavelet techniques. Our results, based on discrete wavelet, showed that there turned out to be noticeable correlation between the heave in global Sukuk issuance and the crude oil prices on more times than not.
