Kuala Lumpur: Malaysia retained its position as the leader in the Sukuk market with its combined domestic and international issuance of $612 billion, according to the International Islamic Financial Market (IIFM) Sukuk Report 2018.
Launched at the IIFM seminar today − an event organised by IIFM and hosted by Labuan IBFC − the report suggests that Malaysia with its deep capital market retained its position as the top Sukuk issuer over its peers from the Far East (i.e. Indonesia with USD63 billion) and Gulf Cooperation Council (i.e. Saudi Arabia USD95 billion and United Arab Emirates with USD68 billion).
“Malaysia has always played an important innovative role in Islamic financial services, boasting a comprehensive regulatory framework for Islamic banking, finance, Takaful and asset management,” Labuan Financial Services Authority Director-General Danial Mah Abdullah, said.
“The seminars and workshops organised by the IIFM in various jurisdictions internationally have attracted significant interest from its members and the industry. It is indeed a privilege that this seminar is held here in Kuala Lumpur today, in conjunction with Labuan FSA being the host for the IIFM Board Meeting.”
“We hope that this seminar will open the gateway for increased collaboration and new opportunities to propel the Islamic financial services industry to a higher level of development for the benefit of all its stakeholders.”
“As an extension and in support to this, Labuan IBFC has also been an innovative bed for Islamic financial products. For instance, the introduction of Waqf embedded within a private foundation set up as a wealth management structure, through the Labuan International Waqf Foundation is a classic example of this innovation from Labuan IBFC. It is also home to the world’s first USD denominated exchangeable Sukuk. These have contributed to Malaysia’s position as the global leader in Sukuk issuance.”
“Barring Malaysia, the corporate Sukuk issuances in most of the established jurisdictions is below expectation and challenges including legal and policy issues must be resolved to encourage more Sukuk issuances by corporate entities,” Ijlal Ahmed Alvi, Chief Executive of IIFM, added.
“There is a degree of confidence in both established Sukuk issuing jurisdictions as well as new jurisdictions entering the Sukuk market which is evident from longer dated Sukuk ranging from 30 years to perpetual being issued.”
The one-day IIFM seminar featured a line-up of high profile international speakers who deliberated on specific products with an impact on the development of the Islamic finance industry.
Speaking at the opening remarks, Danial said that this seminar provides an excellent opportunity to build greater awareness and enhance understanding on the standardisation efforts spearheaded by the IIFM.
“IIFM, in publishing Shariah-compliant standard documentation and product confirmations for the Islamic finance wholesale market; is assisting in creating a transparent and robust industry and I expect the leadership of Islamic banks as well as the regulators to encourage the use of IIFM standards in their jurisdictions which will further enhance efficiency, reduce costs, promote best market practice and serve in the unification and harmonisation of the industry,” Khalid Hamad, Chairman of IIFM said.
“The standards published by the IIFM has brought tremendous benefits to the industry by reducing legal and Shariah compliance related costs, strengthening risk management capabilities, increasing efficiency, promoting Shariah harmonisation and encouraging law reforms,” Danial said.
“These standards are not only utilised by financial institutions which are active in Islamic finance markets in the GCC, Africa, Asia and Europe but also by the regulators as reference for providing Shariah-compliant facilities to Islamic financial institutions in their respective jurisdictions.”
In addition, the Director-General encouraged more Islamic financial institutions to join IIFM and together play an active role in deliberating and shaping the standards being developed by the IIFM to create a robust, transparent and efficient Islamic financial market through standard Shariah-based financial contracts.
