In fact, the sukuk is now becoming an internationally acceptable Islamic capital market’s instrument akin to the Murabaha and the Ijarah contracts. Sovereigns such as the UK Treasury and the Japanese Ministry of Finance are now seriously exploring the potential use of the sukuk as a debt management tool in the wholesale sterling and yen markets. The World Bank and the International Finance Corporation have already issued two local currency papers in Malaysia. The IFC has subscribed to sukuk issuances in the GCC markets.
The biggest potential is in the quasi-sovereign (utilities) and both rated and unrated corporate issuances, as companies and banks seek to raise finance to fund expansion, refinancing existing more expensive debt, or for general balance sheet purposes. Sukuk could also be an ideal financing tool for infrastructure development and project financing. Despite the credit crunch woes in the conventional financial markets, as result of the subprime mortgage crisis in the US, Islamic mortgage securitisations and other securitisations are set to increase in 2008 and beyond.
In light of this, a focused seminar on Islamic Capital Markets could not be more timely, especially to inform the market and to discuss issues relating to structures, UK Host.
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