SUKUK

(ISLAMIC BONDS)
AZUFASYA ABDULLAH
2009250262
NORSHIDAH ZAKARIA
2009897798
 QUESTIONS:

a) What is sukuk?
b) Discuss the various types of sukuk.
 a) What is sukuk?
• Sakk (certificate) are participation
certificates against a single asset /a pool
of asset .
• Each sukuk represents proportionate
beneficial ownership of an asset for a
define period when the risk and the
return associated with the cash flow
generated by the underlying asset / pool
of asset and passed to the sukuk holder.
 • Bond vs Sukuk

• BONDS • SUKUK

• -Contractual • -The sukuk

debt holder
obligation claims an
whereby the undivided
issuer is beneficial
contractually ownership in
obliged to the
 Features of Sukuk
• Liquid instruments
• Regular periodic income streams during
the investment period.
• Do not pay interest and make regular
payments based on profit from approved
of investment or rent on a property.
• Sold on discounts
• Have a shorter period with the maturity
of 3 to 5 years
 b) Discuss the various types of
sukuk.
• Sukuk can be many types depending upon the
type of Islamic modes of financing and trades
used in its structuring.
• The most popular types of sukuk are:-
– Ijarah sukuk
– Salam sukuk
– Musharakah sukuk
– Mudharabah sukuk
 1) Ijarah Sukuk
• Certificates that represent ownership of
equal shares in a rented real estate or the
usufruct of the real estate.
• These sukuk give their owners the right to
own the real estate, receive the rent and
dispose of their sukuk in a manner that does
not affect the right of the lessee, i.e. they are
tradable.
• The holders of such sukuk bear all cost of
maintenance of and damage to the real
estate.
 2) Salam Sukuk
• Certificates of equal value issued fot the
sake of mobilizing capital that is paid in
advance in the way and the commodity
will be delivered later.
• Issuer = Seller
Subsribers/certificate holder = buyers of
the items produced.
• The holder of salam sukuk is entitled to
the commodity when the commodity is
delivered to the buyers.
 3) Mudarabah Sukuk
• Investment sukuk that represent the
portion of the ownership in the
Mudarabah equity.
• Registered in the names of holders on
the basis of undivided ownerships of
shares and the return according to the %
ownership of shares.
• Used for enhancing public participation
in big investments projects.
 4) Musyarakah Sukuk
• Investment sukuk that represent the
Musyarakah equity.
• Used for mobilizing the funds for
establishing the new project,
developing an existing one or financing
a business activity on the basis of the
partnership.
 Other types of Sukuk:
Contract which gives the power to a person to
●
●

Wakalah Sukuk nominate other person to act on his behalf as long as

he is alive based on the agreed term and conditions.

Ijarah Thumma Contract which begin only as an Ijarah Contract

●
●

but at the end of the lease period, a lessee will

Bai’ Sukuk purchase the asset at an agreed price.

Hybrid ●
●The issuance and trading of sukuk taking into account
the hybrid or mixed asset sukuk from the various
demands of investor.
Sukuk ●Comprises of Istisna + Murabaha + Ijarah.
●
 Issued for the purpose of using the fund mobilized
Al Musaqa
●
●

through the subscription for the irrigation of fruit

bearing trees, spend and care for them so that the

Sukuk certificate holders become entitled to a share in the

crops as per agreements.

Murabah ●
● Issued by the Murabahah commodity, subscribe by the
buyers of that commodity and the realised fund are the
purchasing cost of the commodity.

ah Sukuk
●
● The subsribers own the Murabahah commodity and entitled
to its final price upon the sale back of the commodity.

Istisna ●
●

●
●
Certificates that carry equal value and issued by the manufacturer
(seller/supplier) with the aim of mobilizing the funds that are required for
producing the certain product that are owned by the certificate holder.
Istisna Sukuk are quite useful for financing the large infrastructure projects.

Sukuk
●
● Issuers = manufacturer
●
● Subsribers/certificate holder = buyers of the items produced.
 Conclusion
• Sukuk has developed as one of the most significant
mechanisms for raising finance in the international
capital markets through Islamically acceptable
structures.
• Multinational corporations, sovereign bodies, state
corporations and financial institutions use
international sukuk issuance as an alternative to
syndicated financing.
• Although we have discussed about the 4 types of
sukuk that are most important and common , the
other types of sukuk are also playing significant role in
emerging markets to help issuers and investors alike to
participate in major projects, including airports,
bridges, power plants etc..
Thank
You…