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Bloomberg debuts corporate sukuk index for Islamic finance

Bloomberg has introduced a new Malaysian Ringgit (MYR) corporate sukuk index, developed with the Association of Islamic Banking Institutions Malaysia (AIBIM) and Bursa Malaysia, with an aim to benchmark for corporate bonds and to enhance market transparency.

The Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index will act as a benchmark for investors of ringgit-denominated Islamic bonds in Malaysia, the world’s biggest sukuk market, according to the company.

The new corporate sukuk index will track and measure the performance of the most liquid and credit-worthy Islamic corporate bonds in Malaysia, while Bloomberg will compute the Index every day, with rates and prices contributed by member banks of AIBIM, claims Bloomberg.

Low borrowing costs is driving issuance in the Malaysia market, while the demand of corporate and sovereign sukuk across the globe has surged substantially.

Bloomberg data points out that Malaysia posted a record year for sales of corporate sukuk, with potentially about 20 billion ringgit of Shariah-compliant debt.

Bloomberg’s business manager for islamic finance Kamel Hajri said, "This collaboration means we now have a complete portfolio of Islamic finance indices and tools for Malaysia."

AIBIM president Dato’ Mohd Redza Shah Abdul Wahid said, "Strategic collaboration to develop localized financial products will help stimulate the long-term growth, competitiveness and sustainability of Islamic finance services."

The current roll out of sukuk index is third in row, launched in collaboration with Bank Negara, AIBIM and Bursa Malaysia.

During 2011, Bloomberg launched the AIBIM Bursa Malaysia Sovereign Index (BMSSITR) and the Malaysia Sukuk Ex-MYR Index (BMSSUTR), as part of its Islamic Finance Platform (ISLM), a broad set of data, analytics and news dedicated to Shariah-compliant products and services.