Record Detail

Sukuk has been one important Islamic capital market instrument. However, as Sukuk operates within the
context of existing global capital markets, Sukuk also needs some features of conventional financial markets.
Hence, a liquid Islamic secondary market for Sukuk is also needed to make Sukuk a viable alternative to
conventional bonds, and an instrument of choice for more countries and corporations. However, one of main
challenges facing Sukuk is the lack of liquid and active secondary markets. In view of this, this paper attempts
to review the concept of conventional & Islamic secondary markets, the present state of Sukuk secondary
markets, and things that could be done to enhance Sukuk secondary markets. The research methodology
applied will be based on literature review related to Sukuk secondary markets and international Islamic
finance reports. The paper argues that to enhance the role of Sukuk secondary markets, there is a need to
create much more Sukuk issuance in primary markets. To have more Sukuk issuance in primary markets,
Sukuk issuance process needs to be made less complicated and Shari’ah related hindrance needs to be
addressed. This will also need to be complemented with creating more dealer markets for Sukuk, establishing
an Islamic mega bank, more financial innovation, and reaching to retail investors.