Five major trends are having a significant bearing on the future development of the global sukuk market. Firstly, the bond market is now becoming key to meeting the funding requirements for both the public and private sectors in emerging market economies. This is particularly the case for the Middle East and Asia, which are among the fastest growing regions in the global economy. This includes financial needs of the private sector following the privatisation and implementation of infrastructure projects. The development of the Islamic Bond Market, the Sukuk Market will provide opportunities for the corporate sector, the government agencies, multinational corporations and multinational development institutions to raise funds through the issuance of sukuk to meet their financing requirements. The sukuk market also serves as an important platform, complementing the conventional bond market, in enhancing the effectiveness and efficiency for the mobilisation and allocation of funds within the domestic financial system, as well as in the international financial system. Secondly, while there has been growing interest in the issuance of sukuks by corporations, sovereigns and multinational corporations, the demand for sukuks significantly exceeds the supply. Today, the global sukuk market, denominated in international currencies, is estimated to exceed USD50 billion. Although the size of the market is modest by global standards, the sukuk market is experiencing remarkable growth, increasing at an average rate of growth of forty per cent per annum. The significant demand for sukuks have been spurred by the high levels of surplus savings and reserves in Asia and in the Middle East.

There is also positive response from the local and foreign financial institutions to establish International Islamic Bank, International Takaful Operator, as well as International Currency Business Unit to undertake international currency business in Islamic finance in Malaysia. To date, eight financial institutions have been granted approval to set up such International Currency Business Units in Malaysia. Commercial banks and investment banks licensed under the Banking and Financial Institutions Act 1989 (BAFIA) are allowed to establish International Currency Business Units to carry out Islamic banking business under their existing entities. BIS Review 88/2007  3  To enhance the delivery system to facilitate their establishment, an "executive green lane" has been accorded to expedite applications by expatriates for long-term employment passes with multiple entry visas. In addition, the Foreign Investment Committee rules are also relaxed further to allow for 100 percent foreign equity ownership in these financial institutions. The MIFC portal has also been launched as the primary source of comprehensive online information on the latest initiatives and developments, and enables convenient access to application forms, procedures and guidelines related to entrance and participation in the MIFC. This Portal, is now accessible online at www.mifc.com. The large gathering of practitioners here for these two days to discuss the wide ranging matters that relate to issuers and investors will contribute to enhancing the collective understanding and expanding the boundaries of our knowledge on the opportunities in the sukuk market and the potential that the Malaysian sukuk market provides and its linkages with other international Islamic financial systems.