News: Thomson Reuters and Bloomberg launch Islamic sukuk market indices

For more information please refer to the press releases below.

For more on the topic of Islamic banking from the September edition of TheEDGE magazine, please click here.

Thomson Reuters Launches New Global Islamic Index to Monitor Sukuk Market

Transparent independent benchmark to price, measure market accountability and performance

Dubai, United Arab Emirates, September 18 – Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the launch of the Thomson Reuters Global Sukuk Index, an independent and transparent benchmark for investors seeking exposure to sukuk (Shariah-compliant) fixed-income investments, to be used to monitor the performance of the sukuk market.

The announcement of the launch of the index was made today at the Global Islamic Finance Forum (GIFF) 2012 in Kuala Lumpur, Malaysia.

The US$1.2 trillion (QR4.4 trillion) Islamic finance industry is currently growing at more than 15 percent 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. The Thomson Reuters Global Sukuk Index will attempt to bridge the challenge of information asymmetry in the global sukuk market.

“These are unprecedented times for the US$214 billion (QR779 billion) sukuk market; there have been defaults, restructuring, maturing, rollovers, corporate issuers, launch of sukuk funds, announcement of secondary market platforms (Saudi Arabia), innovative issuance (Khazana’s Renminbi) sovereigns declaring issuance (South Africa), and the growing development of the Islamic debt capital market to compliment the bank financing model,” said Rushdi Siddiqui, global head of Islamic finance, Thomson Reuters.

“The common denominator of need here is an independent benchmark, including independent pricing, to measure accountability and performance. We spoke to customers and listened to their feedback about sukuk data collection, methodology and pricing. We quickly realized that there is a need for an independent entity such as Thomson Reuters to provide impartial data to inspire confidence and trust for investors.”

 Bloomberg launches new corporate sukuk index for islamic finance

Benchmark for corporate bonds enhances market transparency

Kuala Lumpur, September 18 – Bloomberg today announced further commitment to the Islamic finance market with the launch of a Malaysian Ringgit (MYR) corporate sukuk index, developed with the Association of Islamic Banking Institutions Malaysia (AIBIM) and Bursa Malaysia. The Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index will serve as a benchmark for investors of ringgit-denominated Islamic bonds in Malaysia, the world’s biggest sukuk market.

Global demand for corporate and sovereign sukuk has grown over the last decade and in Malaysia, as low borrowing costs continue to drive issuance. Malaysia is having a record year for sales of corporate sukuk, with potentially about 20 billion ringgit of Shariah-compliant debt in the pipeline, according to data compiled by Bloomberg. The new corporate sukuk index will track and measure the performance of the most liquid and credit-worthy Islamic corporate bonds in Malaysia. Bloomberg will calculate the Index daily, with rates and prices contributed by member banks of AIBIM.

“Bloomberg has been investing in Islamic finance globally and this announcement reaffirms our commitment to Malaysia’s development as a global Islamic financial centre,” said Kamel Hajri, Bloomberg’s Business Manager for Islamic Finance. “This collaboration means we now have a complete portfolio of Islamic finance indices and tools for Malaysia. We look forward to expanding our joint efforts with key industry players to further enhance market transparency and liquidity, with the goal of fulfilling investor demand for more robust Shariah-compliant solutions.”