The Role of Sukuk in Islamic Capital Markets
4
In conclusion, the critical success factors for the establishment of a sustainable sukuk market
include the following:
Cohesive collaboration with key market stakeholders – the development of a country’s
economic growth is the responsibility of all market players. Specific roadmap and
framework for the inclusion of ICM, interlinking sukuk as a core component is key to guide
and measure the effectiveness of participation level.
Vibrant ecosystem – the amalgamation of a strong legal and regulatory
regime, coupled with a conducive tax environment is the basic building
blocks for sustaining long-term capital market growth. Its evolution to
establish a compelling value proposition for sukuk will be the tipping
point in creating a successful ICM landscape.
Sustainable supply of private sector – the best yardstick in tracking the
pulse of a local sukuk market is the performance of the private sector (i.e.
quasi-government and corporate issuance). There are many successful
precedence of the role private sector plays in promoting economic growth
and ensuring their support is a commercial balance which needs to be
developed on the onset.
Shariah governance framework – a seamless Shariah governance process build into the
financial system will make it attractive for all market players. Harmonistion of Shariah
principles and interpretations adds clarity to product development, builds market
confidence and creates awareness of the benefits of Islamic finance.
Intermediation of domestic financial resources – core to building a
sustainable financial environment is the effective mobilisation of
domestic financial resources. However, basic pillars to grow domestic
wealth starts with the stability of a country’s macroeconomic factors that
promotes value creation within the domicile financial system. Once this is
present there will be a competitive financial system that mobilises
internal savings (e.g. pension funds) for productive investment.