By NNN-Bernama,
Kuala Lumpur : The Association of Islamic Banking Institutions Malaysia (AIBIM) is working to develop a Malaysian Ringgit sukuk (Islamic bonds) index to measure the performance of highly liquid, high grade bonds, including on-the-run Ringgit-denominated sukuk in Malaysia.
The index is expected to be mainly for use as a benchmark for investors seeking exposure to Syariah-compliant fixed-income securities, the association said in a statement here Thursday.
“The goal is to create a new Malaysian Ringgit sukuk benchmark index, as well as spur the creation of customised index-linked products,” said AIBIM president Zukri Samat in the statement.
“We are confident that this index will not only act as the Islamic benchmark of choice among investors, but will also contribute towards strengthening further the foundation of Islamic finance, in terms of its viability, competitiveness and sustainability, particularly in this challenging global financial environment.”
The sukuk index is expected to become another milestone for Malaysia’s Islamic financial
services industry (IFSI) and will support the government’s efforts to promote Malaysia as the global Islamic financial hub.
AIBIM believes that the index would help stimulate further innovation among member institutions to meet demand for competitively priced, effective and all-encompassing products.
The Islamic capital market in Malaysia has emerged as an IFSI segment with huge growth potential, the association said, noting that today, the country had the full spectrum of products, infrastructure, institutions, intermediaries and investors, contributing to the development and greater depth of the overall capital market.
AIBIM said Islamic capital market products and services had also become an integral part of Malaysia’s overall capital market landscape, able to offer viable and competitive alternatives to conventional peers.
“The strategic cross-border alliances with leading global players by our market intermediaries and institutions as well as the direct participation of Malaysian intermediaries in some foreign markets will greatly contribute towards enhancing international presence for Malaysian products and services,” it said.
“Through strategic partnerships and collaborative efforts, we will be able to build an extensive and leading-edge Islamic financial community that can compete globally.”