Dubai\'s Islamic bonds are rallying to a record as the rebounding economy boosts company profits. The yield on the emirate\'s 6.396 per cent dollar- denominated sukuk due in 2014 has fallen 58 basis points since the end of June to an all-time low of 4.289 per cent on Tuesday, according to data compiled by Bloomberg. The decline cut the yield gap with Abu Dhabi\'s non-Islamic debt to 288 basis points, the smallest since June 1. Dubai is experiencing a revival in investor interest after the International Monetary Fund said in April the emirate\'s economy will grow about 3 per cent this year. Safe haven appeal Article continues below \"There has been a marked improvement in sentiment as Dubai\'s core economy is booming,\" Akbar Khan, a director at Al Rayan Investment in Doha, said in an interview on August 2. \"It has benefited greatly from regional unrest. Deposits, tourists and trade have flowed into Dubai in a classic flight to safety.\" The cost of insuring the emirate\'s debt against non-payment for five years fell in each of the last four quarters. Credit- default swaps for Dubai fell 20 basis points so far this quarter to 320 basis points on August 2, according to data compiled by CMA. The average yield on Dubai\'s debt dropped four basis points to 3.13 per cent on Tuesday, according to the HSBC/Nasdaq Dubai Sovereign US Dollar Sukuk Index. Dubai sukuk maturing in November 2014 offer the highest yields of the eight securities listed on the index. Ras Al Khaimah\'s 8 per cent Sharia-compliant debt yielded 2.27 per cent and the yield on Abu Dhabi\'s 5.5 per cent bonds was 1.42 per cent on Tuesday. The extra yield demanded by investors to hold Dubai\'s Islamic bonds over Malaysia\'s 3.928 per cent sukuk due in June 2015 declined to a record-low 198 basis points on Tuesday, data compiled by Bloomberg showed. It widened to 205 Wednesday.