Clientele Effect in Sovereign Bonds: Evidence From Islamic Sukuk Bonds in Malaysia Available to Purchase

We thank Emir Hrnjic for suggesting this topic. We would also like to thank Christine Kon for her excellent research assistance, and Johnson Mo for his constant advice and support for this project. We are grateful to Yakov Amihud, Florian Nagler, Obiyathulla Bacha, M. Shahid Ebrahim, Zhang Weina, Zhang Weiqi, Yacine Ait-Sahalia and seminar participants at NUS Business School, NYU-Stern Corporate Governance Lunch, the Nomura Islamic Asset Management 10th Anniversary Investment Conference, and Imperial College for detailed and helpful comments. Subrahmanyam acknowledges generous financial support from the Anneliese Maier Award of the Alexander von Humboldt Foundation. Chen acknowledges generous financial support from the Ian Potter ’93D PhD Award at INSEAD. We are thankful to the Editor-in-Chief, Ivo Welch, for his insightful conjectures and suggestions, which have vastly improved the identification of the Islamic clientele effects in our paper. We also acknowledge the assistance of anonymous traders and portfolio managers in the Malaysian bond market, as well as officials at Bank Negara Malaysia (Central Bank of Malaysia) and Employee Provident Fund (EPF) Malaysia, for sharing their thorough understanding of market practice with us.