Islamic bond issuance jumped sharply in the first-half of the year as more western banks and institutions invested in one of the world’s most rapidly growing asset classes.

The sukuk, or Islamic bond, market grew 75 per cent to $85bn in the total of outstanding issues in the first half of 2007. The $24.5bn funds raised in the first half of this year nearly surpassed the total amount of new issuance in 2006 of $26.8bn, according to the Islamic Finance Information Service.