SUKUK MARKET EXPERIENCES POSITIVE DEVELOPMENTS, SAYS SC

KUALA LUMPUR, July 1 (Bernama) -- The sukuk market saw positive developments
in the aftermath of the global financial crisis with worldwide issuances
increasing to US$23 billion in 2009 from US$19 billion the previous year.

Securities Commission Malaysia (SC) chairman Tan Sri Zarinah Anwar said that
US$9.7 billion of the total issuances came from Malaysia.

"This demonstrates continued demand for sukuk in general, although there
will always be a continuing demand for sukuk by investors who are permitted to
invest only in Syariah-compliant instruments," she said at the Fourth
International Islamic Capital Market Forum 2010 here Thursday.

According Zarinah, the growing interest in sukuk funds within the global
Islamic fund management industry also indicates great potential for the
continued growth of the sukuk market.

"The range of sukuk instruments available to investors in Malaysia is
unparalled and these issuances come from a broad spectrum in issuers," she said.

"The recent issuance of the Malaysian sovereign sukuk led to overwhelming
demand with the issue being oversubscribed by almost five times with investors
coming from the Middle East, Asia, the United States and other regions."

This reinforced the acceptability of sukuk as a viable investment
alternative, notwithstanding the challenges raised, Zarinah said.

"Among the challenges facing the sukuk market is that with a greater volume
of issuances, there will be a need for common standards and methodologies for
analysis to enable sukuk to migrate from being assessed by way of due diligence
to being assesed through standardised financial analysis," she said.

"Having saying that, a decace ago, no one would have imagined the growth we
have achieved in the last 10 years."

Thus, she added, developing relationships between jurisdictions and learning
from peers' experiences are valuable in efficiently moving towards a stronger
Islamic finance industry.

-- BERNAMA