Despite a securitisation market worth $2 trillion in an overall sector that boasts of over $500 billion of Shariah-compliant assets under management worldwide, Islamic secondary markets currently stand at a value of just $20 billion with a growth rate steady at only 20 per cent per annum over the past decade or so, Lilian Le Falher, Senior Manager and Head of Treasury at Kuwait Finance House, Bahrain, told Bahrain Tribune at the Second International Islamic Financial Market (IIFM) Conference yesterday.
"The figures denote a state of stagnation in the Islamic secondary market, regardless of the 15 to 20 per cent expansion rate being witnessed for the entire Islamic capital market sector," said Falher. "Fundamental factors behind the circumstances include the absence of an Islamic equivalent of a bond market to tap into the ever-increasing secondary market liquidity pool and standard Shariah-compliant contracts for known Islamic financial instruments, including Murabaha, Mudaraba, and the like."
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