Malaysia has been a global leader in Shariah-compliant finance, particularly in Asia and the Pacific Rim.
This has particularly been true when it comes to Shariah bonds, better known as sukuk.
Long time readers of SFW know that promoters of Shariah finance are fond of claiming that Shariah finance is superior in terms of ethics to conventional finance.
Now we have a new story that brings all these aspects into focus.
The Shariah bond market in Malaysia is drying up due to apparent corruption involving the country’s Prime Minister Najib Razak…
Global investors cut holdings of Malaysian bonds in July as media reports revealed almost $700mn of transfers to Prime Minister Najib Razak’s bank account. A probe showed the funds were donations.
Malaysian companies are putting sukuk sale plans on hold as corruption probes cloud the outlook for yields…
The number of Shariah-compliant bond deals completed so far in 2015 has fallen to 149, the least since 2011 and down from 177 a year earlier, data compiled by Bloomberg show. Issuance has slumped 27% to a five-year low of 30.1bn ringgit ($7.3bn).