69
3.5.4 ANALYSIS OF SUKUK INVESTMENTS IN OIC COUNTRIES
Based on our observation of sukuk markets, the dearth of sukuk issuances has resulted in
investors’ buy-and-hold behaviour, thereby causing the lack of a secondary market. For
example, Malaysia’s secondary trading is more active than other sukuk markets due to its
volume and number of sukuk issues. Nevertheless, the country’s Employees Provident Fund’s
launch of a Shariah-compliant fund with an initial investment of RM100.0 billion in early 2017
has exerted pressure on the sukuk pipeline. Coupled with Islamic banks’ high liquidity
requirements, this will further affect market conditions. In support of Islamic banks’
requirements for liquid assets, Islamic securities issued by the government, local central banks
and selected highly rated sukuk have been used to fulfill market demand.
The continued progress in product development and the identification of potential sukuk
issuers in domicile sukuk markets will bode well for supporting the growing demand for
Shariah-compliant assets. As highlighted earlier, sukuk has proven a useful tool in the funding
of infrastructure projects. Continued development that supports both commercial needs and
Shariah requirements, as well as the cooperation of all market participants, will strengthen the
pillars holding up a country’s ICM.