The influence of economic indicators towards Sukuk offerings in Malaysia / Mohd Husnin Mat Yusof, Zaimi Mohamed and Wan Mansor Wan Mahmood

The present study examines the relationship and influence of selected variables towards the behaviour of sukuk offerings. In particular, the influence of FBM KLCI on certain sectors of the economy, specifically the Islamic Capital Market is tested in this study. Four (4) other indicators obtained from Bank Negara Malaysia are employed. They are the FTSE Bursa Malaysia EMAS Shariah Index, Base Lending Rate (BLR), Islamic Interbank Money Market Rate (IIMMR) and gross domestic product (GDP). In addition, the issuance of sukuk proxied for ICM is obtained from the Securities Commission Malaysia. Using the data for the period from January 2001 to December 2010, the results show that two of the variables do influence the issuance of sukuk. Studies on Islamic financial instruments such as the Islamic bonds (sukuk) is very significant in support of the growing industry. Not only that it will ensure the success of Islamic banking and finance industry, but also provide valuable information to companies in their fund raising efforts.