It stands for Islamic capital market; the market in which Shari’ah complaint securities/ assets (capital instruments) such as equities, sukuk, and other securities are traded. The Islamic capital market (ICM) is an integral part of the Islamic financial system in a country. It is a market where individuals, companies, and governments with surplus funds lend to (or invest with) individuals, companies, or governments with a shortage of funds.

This market is a financial intermediary by channeling funds from surplus units to deficit units. It operates as a Shari’ah compliant alternative to the conventional capital market for capital providers (investors/ savers) and users. By composition, ICM consists of primary and secondary markets. The secondary market provides liquidity to tradable assets- i.e., the opportunity to enter and exit the market and take different position in such assets. It helps determine prices of the assets based on supply and demand, risk inherent in the tradable assets, and information and news flow.

Capital market products include Shariah-compliant securities, sukuk and similar instruments, Islamic real estate investment trusts (Islamic REITs), Islamic unit trusts, etc.