New short-term sukuk market to boost liquidity

Author: Ashley Lee | Published: 29 Apr 2013

KEY TAKEAWAYS

  • The International Islamic Liquidity Management’s new programme to issue short-term sukuk certificates with tenors of up to one year will help Shariah-compliant institutions manage liquidity;
  • Shariah-compliant institutions cannot access the traditional commercial short-term or asset-backed paper markets. The new sukuk market aims to serve the same function for Shariah-compliant institutions;
  • The new programme’s success will be predicated on the amount of institutions interested in taking part. Standard Chartered is the primary dealer for the programme, but more agreements will be signed, likely with Shariah-compliant institutions.

The International Islamic Liquidity Management’s (IILM) new short-term sukuk programme gives Shariah-compliant financial institutions a new way to manage their liquidity.

It is the first US dollar Shariah-compliant, highly-rated short-term investment product targeted at Shariah banks and financial institutions, to be used as a tool for liquidity management.

The programme, launched on April 6, is charged with purchasing sovereign, sovereign-linked...