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10 Jul | Wednesday
Islamic Insurance Could Unlock Growth in Sukuk Market

Linking Islamic insurance products with sukuk issuances could be the next phase of development in Islamic finance. One of the biggest constraints in the sukuk market has been the lack of secondary liquidity. A bigger sukuk market can only happen when bigger institutions become involved. The pool of investible funds with insurance companies is the next big target for building capacity in the Islamic capital markets. However there has been little movement in this direction given that Islamic insurance and reinsurance companies have not taken off. Nevertheless there are developments on this front, such as the Cobalt initiative in London, which are aiming to drive development in this space. Establishing a link between the two segments would create a deeper pool of demand for Islamic products as well as provide further due diligence to sukuk deals.

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