Sukuk transparency needed to spur growth: Moody’s

Sukuk transparency needed to spur growth: Moody’s

sukuk

The Islamic finance industry needs to be clearer about the nature of its sukuks, or Islamic bonds, if their growth is to be sustained in the long term, ratings agency Moody’s said in a reported on Wednesday.

The nascent Islamic finance industry is debating whether it should replicate conventional financial products or develop its own structures.

"For the long-term health and sustainability of the market, Moody’s believes all parties need to be very clear about the ‘substance’ of the underlying sukuk risk in question to avoid the situation where some parties will be confused … by complex Islamic terminology or legal jargon," the report said.

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