By Habhajan Singh
Giving a boost to secondary sukuk trading is one of key issues to be discussed at the two-day International Shariah Scholars Dialogue (ISSD) 2008 beginning tomorrow.
The session, organised by the International Shariah Research Academy for Islamic Finance (Isra), will see the presence of four globally renowned Shariah scholars, including Sheikh Prof Dr Mohamed Ali Elgari who is currently Professor of Islamic Economics at King Abdul Aziz University, Saudi Arabia.
Associate Prof Dr Shamsiah Mohamad (pix) from University Malaysia's Academy of Islamic Studies will present a paper on Shariah issues and solutions when it comes to secondary sukuk trading.
The paper, focusing on Shariah issues pertaining to secondary sukuk trading such as bay al-dayn, which represent mix-asset and selling the sukuk at discount, will propose possible solutions.
Shariah scholars Sheikh Nizam M S Yaquby from Bahrain and International Islamic University Malaysia (IIUM) deputy rector Prof Datuk Dr Sano Koutoub Moustapha will act as discussants for the session.
The spectacular growth of sukuk issuance has not seen a corresponding rise in secondary trading, partly due to the fact that most investors have had a buy-and-hold mentality. On top of that, comment by industry players in past media reports also indicated that another reason is the differing structures of the various sukuk that come to the market, with some being assetbased, others based on profitsharing agreement.
The Malaysian sukuk market has expanded significantly with an average annual growth rate of 22% since 2001, according to data from the central bank. In 2007, the sukuk market saw an exceptional growth of more than 70% with new issues during the year reaching a record high to about US$47 billion (RM162.52 billion) and the outstanding global sukuk market surpassing the US$100 billion mark.
Up until August 2008, BNM governor Tan Sri Dr Zeti Akhtar Aziz said the sukuk market has held its ground with a total global issuance now exceeding US$14 billion, and is expected to exceed US$200 billion in 2010.
Isra associate researcher Zaharudin Muhammad will present a paper on "Adaptation of the concept of insurable interest in takaful practices".
Assistant Prof Dr Said Bouheraoua from IIUM's Ahmad Ibrahim Kulliyah of Laws will present another paper entitled "Dhawabit (parameters) for the application of the principles of maslahah and dharurah in Islamic finance".
Among discussants for the two sessions are Associate Prof Dr Younes Soualhi from IIUM's Kulliyah of Islamic Revealed Knowledge and Human Sciences, Sheikh Dr Abdul Sattar Abu Ghuddah from Syria and International Institute of Islamic Finance's (IIIF) Dr Mohd Daud Bakar.
BNM deputy govenor Datuk Mohd Razif Abd Kadir will present the keynote address while Isra executive director Dr Mohamed Akram Laldin will chair the sessions.
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