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Sunday, 22 March 2009

Trend Will Be Sukuk In Local Currency

KUALA LUMPUR, March 18 (Bernama) -- There will be a trend of issuing sukuk in local currency in the next two years as players will be reluctant to lend dollar due to the global economic slowdown.

Kuwait Finance House (Malaysia) Bhd's managing director, Datuk K.Salman Younis said compared with the dollar there was higher liquidity in the local currency in the Gulf Cooperation Council (GCC) countries and Malaysia at the moment.

"Normally, sukuk issuance outside Malaysia was basically in dollar. With the current shortage of dollar in the market, you will see an emergence of issuing sukuk in the local currency," he said during a media roundtable on economic and Islamic finance outlook organised by Dow Jones Indexes here today.

Salman also expects less new sukuk issuances this year.

However, in the long term the sukuk market is expected to remain strong due to rising popularity of Syariah-compliant products in Asia, he said.

On the growth for Islamic finance in Malaysia this year, Salman said the sector would continue to grow despite the global economic slowdown.

"It will grow by taking some market share from traditional banks and from the stimulus package. But once the economy is back to normal it will grow in the fastest phase," he said.

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