While the sukuk or the Islamic bond market has been growing rapidly with increasing number of large and liquid issues, the depth of the financial market, especially in the GCC, is not at the level of the developed countries or at a level some global fund managers would ideally like it to be. For that to happen, global asset manager Franklin Templeton Investments believes that the policy makers should concentrate their efforts at developing more non-banking financial services.
While acknowledging that liquidity has been on an improving trend, Mohieddine Kronfol, chief investment officer, Global Sukuk and Mena Fixed Income at Franklin Templeton Investments, said he would want policy makers in the Gulf and Malaysia to do more to promote money, debt and sukuk markets to have more liquidity going forward.
“Basically, we would like to see, the institutional side of things to develop further [and] that includes pension funds, insurance companies, asset management companies — all of them,” said Kronfol last week in Dubai at the launch of three Sharia complaint mutual funds which are on a daily subscription cycle. “You need to pass legislation and really support them.”
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