Bursa Malaysia released a consultation paper for comment that would facilitate exchange trading of bonds and sukuk on the Malaysian exchange. While there are many exchanges where sukuk are listed, there are few if any where they are traded (usually trades are conducted over-the-counter). This is a big development for the secondary markets because it would significantly increase the transparency of sukuk pricing, although absent greater supply of sukuk, the transparency would likely not make as great an impact.
The proposal from Bursa Malaysia would apply to domestic and global sukuk, but would only include investment-grade sukuk (those with higher than a BBB or equivalent global rating or an AA or AAA local rating) with maturities of greater than one year. Given the focus on the retail market, this makes sense because retail investors are likely to be less able to discern the risks between different non-investment-grade sukuk.
If the market becomes active and proves to be as transparent as expected, it could further attract issuers from other parts of the world including the GCC, because the liquid market and greater pricing transparency could lead to issuers being able to access lower-cost funding. However, as I have mentioned before, most GCC-issuers would not be well-served issuing ringgit-denominated sukuk unless they hedged their exposure to currency fluctuations, something which is more difficult to do for Islamic issuers.