“The market reaction has been very measured. Spreads have clearly moved in response to changes in fiscal outlooks and ratings,” says Patrick Drum, Saturna Capital’s fixed-income lead and portfolio manager, discussing the impact of current events in the Middle East on sukuk and the Islamic finance market. It’s “not so much the conflict itself. Tension is really back to the basics of balance sheet.” Drum joins Bloomberg Intelligence’s Noel Hebert on the latest Credit Crunch podcast to examine sukuk, the market’s size, composition and growth, and the economic backdrop that has helped drive it beyond $1 trillion. The episode also covers risk-adjusted returns, underlying assets and his view of the market’s continued evolution.The Credit Crunch podcast is part of BI’s FICC Focus series.