IFMC to explore strategies to enhance foreign investors participation in sukuk issuance — BNM

KUALA LUMPUR: The Islamic FinancialMarketSubcommittee (IFMC) has been tasked to explore strategies to enhance foreign investors’ participation in domestic sukuk issuances, said Bank Negara Malaysia (BNM) Governor Datuk Abdul Rasheed Ghaffour.

Foreign participation in Malaysia’s sukuk market currently stands at US$12.6 billion (RM59.6 billion).

He said efforts are being intensified to bolster Malaysia’s global stature as an Islamic finance gateway, particularly through enhancing the vibrancy of Islamic financial markets by diversifying instruments and providing regulatory clarity.

“These endeavours aim to widen the range and volume of Shariah-compliant investable assets, including to international investors,” said Abdul Rasheed.

In his keynote address at the virtual Islamic Finance Symposium 2024 organised by FitchRatings on Wednesday, he added that the IFMC, set up by BNM, has made a key progress in hedging, which has led to a Shariah Advisory Council ruling on the permissibility of anticipatory hedging, subject to conditions.

“This is aimed at further developing the Islamic derivatives market, ensuring that it aligns with both Shariah principles and prudent risk management practices,” he said.

Abdul Rasheed said that BNM is also establishing stronger collaboration with the Gulf Cooperation Council (GCC) and Asian countries to advance mutual development in Islamic finance.

“These efforts will strengthen Malaysia’s position to be the Islamic finance gateway to the GCC and Organisation of Islamic Cooperation markets,” he added.

Over the past five years, Malaysia’s sukuk market has grown by about US$70 billion (RM332.3 billion) or 35 per cent to an outstanding amount of US$267.5 billion (RM1.27 trillion). — Bernama