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Islamic finance: the dawn of Sukuk trading
13 September 2007
As Islamic finance blooms in the oil-rich gulf, Marek Sanders investigates how the Sukuk bond is carving a path to a developed and liquid secondary market, and the opportunities arising for securities finance.
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Islamic finance
sukuk bond
secondary market
liquidity
securities finance
repo
securities
An emerging market with a difference, the global market of Islamic banking is growing fast. Its hub in the Middle East is rapidly approaching a stage of development that will see a liquid secondary financial market emerge, quite possibly within the next year or two, which repo and securities lending will inevitably follow.
The total value of Islamic assets is impossible to know for sure because of a lack of aggregate market data, but is commonly estimated at $400 billion, with a yearly growth rate of 20%. But even this estimate is based on the findings of an old study. One of those that calculated the figure a decade ago was Dr Humayon Dar, CEO of BMB Islamic as well as a prominent Sharia economist and pioneer in the development of many Islamic financial products across the Gulf Cooperation Council (GCC) markets. Dar puts the global market at closer to...
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