Sukuk and their Impact on Islamic Financial Markets: Malaysia as an Example

Abstract

The Islamic finance industry has been booming and widespread in the last decade. Financial institutions that deal with Islamic financial instruments have spread in many countries, one of which is Islamic Sukuk. The Sukuk has gained considerable importance in a few years, because of its comparative advantage with other financial instruments, which has encouraged many financial markets to deal with such instruments. Accordingly, the purpose of the present study is to identify the impact of Sukuk on the Malaysian financial market by analyzing the data and statistics during (2003-2017). The study has found that Sukuk has a positive impact on the Malaysian Islamic financial market, and that the increased demand for Sukuk leads to an increase in the volume of issues in the Malaysian Islamic financial market, allowing it to be more active and effective.