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Leveraging Islamic Finance to Develop a Sustainable Capital Market

Sukuk & Capital Markets

The last year has seen unprecedented growth in the Gulf Sukuk market, with major issuances spurring its primary Sukuk market, and new entrants such as Turkey creating diversity in the issuance space. Although Malaysia currently dominates the global issuance table, making up 60% of global Islamic issuances, the challenge to attract cross-border investments and Middle East issuers still remains a hurdle in the country’s bid to create a dynamic and internationally attractive capital market. 

For any capital market to be successful, clear laws and precedence are important elements in attracting foreign issuers and creating a sustainable market. Past defaults and the current global economic environment has further pushed the need for transparency, proper regulations and clear-cut tax laws in order to attract major issuers and to create investor confidence in the market. Diversity amongst investors is also fundamental in avoiding too much concentration in one single geographical area to mitigate risk from an issuer’s perspective. 

 

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