Besides the intrinsic value of the sukuk which are largely asset-backed, convertible for shares or exchangeable with shares, such issuances are attractive as they have a wider investor base that comprise conventional and Islamic investors. With the rising wealth of global investors seeking Shariah compliant investments the market has become highly competitive. More recently, it has prompted corporations worldwide including global multinational companies to consider this as a financing option. The development of the sukuk market in Malaysia has involved extensive and wide ranging initiatives that include facilitating an efficient issuance process, enhancing the price discovery process, establishing of a benchmark yield, broadening of the investor base, promoting the liquidity in the secondary market and strengthening further the legal, regulatory and the Shariah framework. These initiatives have also been supported by the development of the financial infrastructure including the settlement system and the bond information system. To position Malaysia as a centre for origination, distribution and trading of sukuk, further steps have been taken to liberalise the market to allow foreign corporations including multinational corporations and multilateral agencies to raise funds in the Malaysian bond market. Funds raised by these entities may be used to finance investment activities in other jurisdictions. The inaugural ringgit denominated Sukuk issue was in 2004 by the International Finance Corporation, and followed by an issue by the IBRD World bank in 2005. In 2006, the market was further liberalized to allow foreign currency denominated sukuks to be issued from the Malaysian market.

Most significant has been the development of the Islamic financial markets, the increase in the range of the financial products and services, the increasing significance of the international dimension of Islamic finance, the development of the international Islamic financial architecture, and the enhanced international inter-linkages that has been brought about by these developments. Transformation of the Islamic financial landscape As recent as five years ago, the development of Islamic finance was regarded as an infant industry striving to prove its viability and competitiveness. At that time, the growth of Islamic finance was organic and largely concentrated in countries where the Muslim population was significant. In these five years, Islamic finance has recorded dramatic growth and has a presence in more than 75 countries both in Muslim and non-Muslim dominated communities. There are also a growing number of the international financial centres that are beginning to offer Islamic financial products and services such as in London, Singapore and Hong Kong. The number of Islamic banking institutions worldwide including conventional banks that are offering Islamic banking services have doubled to more than 300. The total Islamic financial assets under their management is now estimated to exceed one trillion US dollars, about fivefold its magnitude five years ago. Islamic finance is now among the fastest growing financial segments in the international financial system with an estimated average annual growth of between 15 to 20 percent.