FIN 545        - ISLAMIC FINANCE -UNIVERSITI TEKNOLOGI MARA (UiTM),   KAMPUS BANDARAYA MELAKA.
• Sukuk is popularly known as an Islamic or  Sharia compliant ‘Bond’ whilst in actual fact; it  is an asset-backed trust c...
• In its simplest form Sukuk is a certificate evidencing  ownership of an asset or its usufruct and was  developed by Shar...
• Tradable Sharia - compliant capital market product  providing medium to long-term fixed or variable rates of  return.• A...
CONVENTIONAL (BOND)                                ISLAMIC (SUKUK)Papers which evidence indebtedness issued Papers which e...
• Marketability: Sukuk are monetized real  assets that are liquid, easily transferred and  traded in the financial markets...
• The Fiqh Academy of the OIC in February,  1988• concept of a Sukuk  ‘.. any collection of assets can be represented in ...
• Malaysia – experience 1st sukuk in 1990 by  Shell MDS Sdn. Bhd (BBA structure)• Islamic Concept  i.     Murabahah (sale ...
Sukuk issued in the global markets (2008)                          BBA, 1.43%               Salam, 0.46%Istisna, 1.28% Mur...
• Malaysia is undoubtedly the pioneer of the Islamic  capital markets.• The Shari’ah Advisory Council of the Securities  C...
Types of sukuk issued in Malaysia (2008)Source: SC, Kuwait Finance House                                         18%      ...
Issuer           Amount    Year        Transaction Highlights   Tenor                                                     ...
Cagamas MBS Bhd      RM2.05        2005      World’s first Islamic     13                      billion             residen...
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Sukuk

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  • salam.. i like to take it as my revision for sukuk.. i want to copy it but it seem you lock this power point.. can you help me .. i need this power point .
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Sukuk

  1. 1. FIN 545 - ISLAMIC FINANCE -UNIVERSITI TEKNOLOGI MARA (UiTM), KAMPUS BANDARAYA MELAKA.
  2. 2. • Sukuk is popularly known as an Islamic or Sharia compliant ‘Bond’ whilst in actual fact; it is an asset-backed trust certificate.• Sukuk is a plural of Sakk. Which means “legal documents, deed, check”. It is an Arabic name for financial certificate but it can be seen as an Islamic equivalent of the conventional bonds.
  3. 3. • In its simplest form Sukuk is a certificate evidencing ownership of an asset or its usufruct and was developed by Sharia experts for the express purpose of answering the financial world’s demand for a Sharia compliant debt instrument.• The development of Sukuk was in response to Sharia’s prohibition on earning returns from loan contracts which returns are based on interest.• Conventional bonds and other derivative instruments that rely on profiting holders by providing returns based on interest are therefore unavailable to Muslims who wish to invest in Sharia compliant investments.
  4. 4. • Tradable Sharia - compliant capital market product providing medium to long-term fixed or variable rates of return.• Assessed and rated by international rating agencies, which investors use as a guideline to assess risk/return parameters of a Sukuk issue.• Regular periodic income streams during the investment period with easy and efficient settlement and a possibility of capital appreciation of the Sukuk.• Liquid instruments, tradable in secondary market.
  5. 5. CONVENTIONAL (BOND) ISLAMIC (SUKUK)Papers which evidence indebtedness issued Papers which evidence in indebtedness,by the issuer/borrower; an IOU with a ownership and investment issued by thepromise to pay debt at maturity debt Issuer/borrower using Shariah principlesLoan Not a loan: Based on sale, lease, partnership or agency relationshipPaper in exchange for monies Asset in exchange for moniesInterest Profit / income from assetTrades – sales of debt instrument Trades – sales of assetNo restriction on utilization off proceeds Utilization of proceeds for Shariah compliant purpose
  6. 6. • Marketability: Sukuk are monetized real assets that are liquid, easily transferred and traded in the financial markets• Rateability: Sukuk can be easily rated• Enhanceability: Different Sukuk structures may allow for credit enhancements• Versatility: the variety of Sukuk structures defined in the AAOIFI standards allow for: structuring across legal and fiscal domains, fixed and variable income options etc.
  7. 7. • The Fiqh Academy of the OIC in February, 1988• concept of a Sukuk ‘.. any collection of assets can be represented in a written note or bond; and that this bond or note can be sold at a market price provided that the composition of the group of assets, represented by the security, consists of a majority of physical assets and financial rights, with only a minority being cash and interpersonal debts.’
  8. 8. • Malaysia – experience 1st sukuk in 1990 by Shell MDS Sdn. Bhd (BBA structure)• Islamic Concept i. Murabahah (sale and buy back) ii. Ijarah (leasing) iii. Bai al-salam (advanced payment) iv. Bai al-istisna’ (purchase order) v. Musharakah (partnership), vi. Mudharabah (profit sharing) vii. Wakalah (agency)
  9. 9. Sukuk issued in the global markets (2008) BBA, 1.43% Salam, 0.46%Istisna, 1.28% Murabahah, 7.38% Musharakah, Ijarah, 48.29% 32.59% Mudharabah, 8.58%
  10. 10. • Malaysia is undoubtedly the pioneer of the Islamic capital markets.• The Shari’ah Advisory Council of the Securities Commission of Malaysia governs the principles on which Sukuk should be issued.• It recognizes Bai Dayn or debt trading as one of the acceptable principles for Sukuk issuances whereby Shari’ah compliant cash receivables arising from contracts such as Murabahah, BaiBithamanAjil (BBA), Ijarah or Istisna are converted into tradable debt instruments.
  11. 11. Types of sukuk issued in Malaysia (2008)Source: SC, Kuwait Finance House 18% Mudharabah BBA 44% 12% Istisna Ijarah 10% Murabahah 14% Musharakah 1%
  12. 12. Issuer Amount Year Transaction Highlights Tenor (Years ) RM125 1990 World’s first ringgit - Shell MDS million Sukukissue by foreignowned, (US$33 non-Islamic million) company Kumpulan Guthrie US$150 2001 World’s first global 8 Bhd million corporate Sukuk Government of US$ 600 2002 World’s first global 5 Malaysia million sovereign SukukInternational Finance RM500 2004 First ringgit Sukukissue 3Corporation (World million by supranational agency Bank) (US$132 million)
  13. 13. Cagamas MBS Bhd RM2.05 2005 World’s first Islamic 13 billion residential mortgagebacked (US$540 securities million)KhazanahNasional US$750 2006 World’s first 5 (Rafflesia million exchangeable Sukuk Capital Ltd) Nucleus Avenue RM8 billion 2007 First Hybrid Sukukin the 50 (Malakoff (US$2.5 World Corporation) billion)MaybankBerhad US$300 2007 World’s first 10 million international subordinated Sukuk Binariang GSM RM15.35 2007 Largest-ever Sukukissue 20 billion in the world (US$4.8 bill)

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