The index is an independent and transparent benchmark for investors seeking exposure to sukuk (syariah-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, it said in a statement released here.
The US$1.2 trillion (RM3.7 trillion) Islamic finance industry is currently growing at more than 15% 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.
Rushdi Siddiqui, Thomson Reuters global head of Islamic finance, said: “These are unprecedented times for the US$214 billion sukuk market.”
He said there have been defaults, restructuring, maturing, rollovers, corporate issuers, launch of sukuk funds, announcement of secondary market platforms (Saudi Arabia), innovative issuance (Khazanah’s renminbi), sovereigns declaring issuance (South Africa), and the growing development of the Islamic debt capital market to complement the bank financing model.
“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 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,” he said.
In addition to being primarily used as a benchmark for investors seeking exposure to syariah-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.