Thomson Reuters Launches Sukuk Index

Thomson Reuters has launched a global sukuk index, an independent and transparent benchmark for investors seeking exposure to Islamic bond (sukuk), at a key finance seminar in Malaysia.

The $1.2 trillion Islamic finance industry is currently growing at more than 15 per cent per annum, and it is led by the Islamic debt capital market, which is primarily composed of sukuk.

It is frequently the topic of conversation by regulators, international lending agencies, bankers, and asset managers in the G-20 countries as well as the 57 Muslim countries for raising funds.

“These are unprecedented times for the $214 billion sukuk market,” said Thomson Reuter Islamic finance global head Rushdi Siddiqui while speaking at the launch of ‘The Thomson Reuters Global Sukuk Index’ at the ‘Global Islamic Finance Forum 2012’ in Kuala Lumpur.

The index will attempt to overcome the challenge of information asymmetry in the global sukuk market, he noted.

“There have been defaults, restructuring, maturing, roll-overs, corporate issuers, launch of sukuk funds, announ-cement of secondary market platforms, innovative issuance, sovereigns declaring issuance and the growing development of the Islamic debt capital market to compliment the bank financing model,” said Siddiqui.

“The common denominator of need here is an independent benchmark, including independent pricing, to measure accountability and performance,” he stated.

“We spoke to customers and listened to their feedback about sukuk data collection, methodology and pricing. We quickly realised that there is a need for an independent entity such as Thomson Reuters to provide impartial data to inspire confidence and trust for investors,” remarked Siddiqui.

“In addition to being primarily used as a benchmark for investors seeking exposure to Sharia-compliant fixed-income investments, the Global Sukuk Index may serve to increase secondary market trading in this growing asset class and facilitate cross-market relative value trading among different asset classes,” he added.

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