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Imc Advantages

Decent Essays

Potential Benefits of ICM Development on Market Segments Sharī`ah-compliant Equities Development of the Islamic equity market typically involves having in place a Sharī`ah stock-screening process which facilitates the identification of Sharī`ahcompliant stocks and therefore attracts wider participation from investors that seek Sharī`ah-compliant products. At the same time, it can facilitate the construction of Islamic equity indices. Sharī`ah-compliant equities may also appeal to the global socially responsible investing (SRI) community, as well as environmental, social and corporate governance (ESG) investors, in view of similarities in their underlying values and principles; therefore, the market demand for these stocks is potentially …show more content…

Development of the Sukuk market should include both the sovereign and corporate segments, to the extent possible and practicable, in order to enable both the public and private sectors to have the widest possible options for fund-raising. Based on the experience of some jurisdictions, government participation and support would be a major factor in developing a sound Sukuk market. Regular issuances by the government would create a yield benchmark for the issuance of corporate Sukuk and also encourage Sukuk issuance by the private sector. The feasibility of this approach nevertheless would differ between one jurisdiction and another, based primarily on the financial and economic specificities of each jurisdiction. In jurisdictions with large infrastructure investments, there are significant opportunities for the growth of Sukuk as a fund-raising means for both the public and private sectors. A facilitative ecosystem to provide SMEs greater access to funding via the ICM would help fuel the growth of these companies and drive the expansion of the SME sector. There are, however, factors for consideration in assessing the viability of SMEs to issue Sukuk, including their financial positions, investors’ risk appetite and the nature of the business. There have also been initiatives in several jurisdictions recently to democratise Sukuk from being a “wholesale”

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