The Role of Sukuk in Islamic Capital Markets

sukuk is expected to play a more important role in the coming years and garner greater

support from regulators, governments and the private sector in building a more sustainable

and eco-friendly economy.

1.2

AIMS, OBJECTIVES AND SCOPE OF THE STUDY

The main objective of this study is to analyze the role of sukuk as an instrument for capital

market development and resource mobilization and as an alternative financing tool for the

economic development of the public and private sectors. The research showcases 6 countries

in different stages of sukuk market development, including 5 OIC member countries and a

selected non-OIC member country. Based on this analysis, the study provides policy

recommendations to promote sukuk at both domestic and global levels. It also envisages to

facilitate the building of a cohesive sukuk development roadmap that OIC member countries

can adopt.

The study specifically covers the following:

The key building blocks in developing a sukuk market, including examining the

theoretical and legal natures of sukuk, the institutions involved in developing the

sukuk market, the parties involved in sukuk issuance, and the requisite conducive

environment.

Comprehensive assessment of sukuk structures, issuances and investments, including

topics and challenges vis-a-vis operational aspects, such as legal and regulatory issues,

Shariah governance, innovation in sukuk structuring, the nature and application of

sukuk structuring techniques, risk analysis, rating and pricing.

Case studies of sukuk development in 6 OIC and non-OIC countries, including the

growth of their sukuk markets, analysis of their sukuk issuances, structures and

investments, the challenges and drivers affecting the development of the sukuk

market, and policy recommendations to address the issues arising and spur the

growth of the sukuk market.

1.3

METHODOLOGY

Based on the objectives and scope of the study, the following methodology has been adopted to

investigate the various aspects of sukuk development in the OIC and selected non-OIC member

countries:

Desktop Research:

This involves the review of the written literature, information,

documents, country experiences, practices and works of relevant international

institutions, and open sources of relevant national institutions. To enrich the study, it

also involves analysis of data from industry and economic reports, research

publications, macroeconomic data, and surveys of OIC countries. Primary data from

Bloomberg and Eikon-Thomson Reuters have been used to assess information on the

market shares of various segments in the Islamic financial markets, including sukuk, to

provide a comprehensive assessment of sukuk structures and issuances across

jurisdictions by different entities―corporate, quasi-sovereign and sovereign.

Survey and Interview (Online Survey, Phone Calls, Face-to-Face Meetings and

Field Visits):

This involves the development of survey questions and semi-structured