DOCSLIB.ORG

The Role of Sukuk in Islamic Capital Markets

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Role of Sukuk in Islamic Capital Markets The Role of Sukuk in Islamic Capital Markets COMCEC COORDINATION OFFICE February 2018 The Role of Sukuk in Islamic Capital Markets COMCEC COORDINATION OFFICE February 2018 This report has been commissioned by the COMCEC Coordination Office to the International Shari’ah Research Academy for Islamic Finance and RAM Rating Services Berhad. The report was prepared by Dr. Marjan Muhammad, Ruslena Ramli, Dr. Salma Sairally, Dr. Noor Suhaida Kasri and Irfan Afifah Mohd Zaki; while the advisors were Promod Dass, Rafe Haneef, Wan Abdul Rahim Kamil Wan Mohamed Ali and Assoc Prof Dr. Said Bouheraoua. The views and opinions expressed in the report are solely those of the author(s) and do not represent the official views of the COMCEC Coordination Office or the Member States of the Organization of Islamic Cooperation. The final version of the report is available at the COMCEC website.* Excerpts from the report can be made as long as references are provided. All intellectual and industrial property rights for the report belong to the COMCEC Coordination Office. This report is for individual use and shall not be used for commercial purposes. Except for purposes of individual use, this report shall not be reproduced in any form or by any means, electronic or mechanical, including printing, photocopying, CD recording, or by any physical or electronic reproduction system, or translated and provided to any subscriber through electronic means for commercial purposes without the permission of the COMCEC Coordination Office. For further information, please contact: The COMCEC Coordination Office Necatibey Caddesi No: 110/A 06100 Yücetepe Ankara, TURKEY Phone : 90 312 294 57 10 Fax : 90 312 294 57 77 Web : www.comcec.org *E-book : http://ebook.comcec.org ISBN : 978-605-2270-13-4 TABLE OF CONTENTS LIST OF TABLES v LIST OF CHARTS vii LIST OF FIGURES ix LIST OF BOXES x LIST OF ABBREVIATIONS xi EXECUTIVE SUMMARY 1 1. INTRODUCTION 5 1.1 GLOBAL OUTLOOK OF THE SUKUK MARKET 5 1.2 AIMS, OBJECTIVES AND SCOPE OF THE STUDY 6 1.3 METHODOLOGY 6 1.4 OVERVIEW OF THE STUDY 7 2. DEVELOPING A SUKUK MARKET: KEY BUIDING BLOCKS 9 2.1 SUKUK AS AN ISLAMIC FINANCIAL INSTRUMENT 9 2.1.1 EVOLUTION OF SUKUK AS AN ISLAMIC FINANCIAL INSTRUMENT 9 2.1.2 GENERAL PRINCIPLES, MILESTONES AND KEY TRENDS 11 2.1.3 THEORETICAL AND LEGAL NATURE OF SUKUK 12 2.1.4 THE COMPATIBILITY OF CURRENT SUKUK PRACTICES WITH ISLAMIC LAW 14 2.2 IMPORTANCE OF SUKUK IN DEVELOPING THE ISLAMIC FINANCIAL MARKET 15 2.2.1 ASSET DISTRIBUTION IN VARIOUS SEGMENTS OF ISLAMIC FINANCE 15 2.2.2 THE ROLE OF SUKUK IN DEVELOPING THE ISLAMIC FINANCE INDUSTRY 16 2.2.3 PIONEERING COUNTRIES IN THE SUKUK MARKET 17 2.3 KEY DOMESTIC AND GLOBAL INSTITUTIONS IN THE SUKUK MARKET AND THEIR ROLES 19 2.3.1 KEY ROLES OF DOMESTIC AND INTERNATIONAL INSTITUTIONS 19 2.3.2 EXISTING STANDARD-SETTING BODIES AND THEIR ROLES 21 2.4 PARTIES INVOLVED IN THE ISSUANCE OF SUKUK: ROLES AND RESPONSIBILITIES 22 2.5 THE IMPORTANCE OF ESTABLISHING SHARIAH ADVISORY BOARDS FOR SUKUK 24 2.5.1 SHARIAH GOVERNANCE FRAMEWORKS (SGFs) AND A CENTRALISED SGF 25 2.6 THE IMPORTANCE OF CREATING A CONDUCIVE ENVIRONMENT FOR SUKUK 26 2.6.1 LEGAL 26 2.6.2 REGULATORY 30 i 2.6.3 SUPERVISORY 32 2.7 NEW FRONTIERS FOR THE DEVELOPMENT OF SUKUK IN THE ICM 33 2.7.1 CONVERGENCE OF SUKUK WITH SRI 33 2.7.2 PROPOSAL FOR A COMMON GLOBAL SUKUK AND TRADABILITY OF SUKUK CERTIFICATES 34 3. SUKUK STRUCTURES, ISSUANCES AND INVESTMENT 35 3.1 CRITICAL SUCCESS FACTORS FOR A SUSTAINABLE SUKUK MARKET 36 3.2 KEY CHALLENGES IN THE DEVELOPMENT OF A SUKUK MARKET 39 3.2.1 LEGISLATIVE FRAMEWORK (COMMON LAW VS CIVIL LAW) 39 3.2.2 TAX FRAMEWORK 40 3.2.3 STANDARDISATION OF SHARIAH GOVERNANCE 40 3.2.4 DEVELOPMENT OF A SUSTAINABLE SUPPLY OF CORPORATE SUKUK 43 3.2.5 LEVEL OF FINANCIAL INTERMEDIATION AND DIVERSIFICATION OF INVESTOR BASE 44 3.3 COMPREHENSIVE ASSESSMENT OF SUKUK STRUCTURES 44 3.3.1 ARAB COUNTRIES 44 3.3.2 ASIAN COUNTRIES 46 3.3.3 AFRICAN COUNTRIES 49 3.3.4 NON-OIC COUNTRIES 50 3.3.5 ANALYSIS OF SUKUK STRUCTURES ISSUED BY OIC AND NON-OIC COUNTRIES 51 3.4 A COMPREHENSIVE ASSESSMENT OF SUKUK ISSUANCES – SUPPLY (SELL SIDE) 53 3.4.1 ARAB REGION 53 3.4.2 ASIAN REGION 57 3.4.3 AFRICAN REGION 59 3.4.4 SUKUK ISSUANCES IN NON-OIC COUNTRIES 61 3.4.5 ANALYSIS OF SUKUK ISSUANCES IN OIC AND NON-OIC COUNTRIES 62 3.5 COMPREHENSIVE ASSESSMENT OF SUKUK INVESTMENTS – DEMAND (BUY SIDE) 63 3.5.1 ARAB REGION 63 3.5.2 ASIAN REGION 65 3.5.3 AFRICAN REGION 68 3.5.4 ANALYSIS OF SUKUK INVESTMENTS IN OIC COUNTRIES 69 4. CASE STUDIES 70 4.1 INTRODUCTION: SELECTION CRITERIA AND METHODOLOGY 70 4.2 MALAYSIA 73 ii 4.2.1 OVERVIEW OF MALAYSIA’S CAPITAL MARKETS 73 4.2.2 GROWTH OF THE SUKUK MARKET IN MALAYSIA 77 4.2.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCE AND INVESTMENT 80 4.2.4 KEY FACTORS UNDERPINNING MALAYSIA’S SUKUK MARKET 91 4.2.5 COUNTRY-SPECIFIC RECOMMENDATIONS 93 4.3 UNITED ARAB EMIRATES (UAE) 95 4.3.1 OVERVIEW OF UAE’S CAPITAL MARKETS 95 4.3.2 GROWTH OF THE SUKUK MARKET IN THE UAE 99 4.3.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCE AND INVESTMENT 104 4.3.4 KEY FACTORS UNDERPINNING THE UAE’S SUKUK MARKET 108 4.3.5 COUNTRY-SPECIFIC RECOMMENDATIONS 112 4.4 INDONESIA 114 4.4.1 OVERVIEW OF INDONESIA’S CAPITAL MARKETS 114 4.4.2 GROWTH OF THE SUKUK MARKET IN INDONESIA 121 4.4.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCE AND INVESTMENT 125 4.4.4 KEY FACTORS UNDERPINNING INDONESIA’S SUKUK MARKET 133 4.4.5 COUNTRY-SPECIFIC RECOMMENDATIONS 134 4.5 TURKEY 137 4.5.1 OVERVIEW OF TURKEY’S CAPITAL MARKETS 137 4.5.2 GROWTH OF THE SUKUK MARKET IN TURKEY 140 4.5.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCE AND INVESTMENT 144 4.5.4 KEY FACTORS UNDERPINNING TURKEY’S SUKUK MARKET 151 4.5.5 COUNTRY-SPECIFIC RECOMMENDATIONS 153 4.6 HONG KONG 156 4.6.1 OVERVIEW OF HONG KONG’S CAPITAL MARKETS 156 4.6.2 DEVELOPMENT OF THE SUKUK MARKET IN HONG KONG 160 4.6.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCES AND INVESTMENTS 161 4.6.4 KEY FACTORS UNDERPINNING HONG KONG’S SUKUK MARKET 164 4.6.5 COUNTRY-SPECIFIC RECOMMENDATIONS 166 4.7 NIGERIA 169 4.7.1 OVERVIEW OF NIGERIA’S CAPITAL MARKETS 169 4.7.2 DEVELOPMENT OF THE SUKUK MARKET IN NIGERIA 171 4.7.3 ANALYSIS OF SUKUK STRUCTURES, ISSUANCE AND INVESTMENT 175 iii 4.7.4 KEY FACTORS UNDERPINNING NIGERIA’S SUKUK MARKET 178 4.7.5 COUNTRY-SPECIFIC RECOMMENDATIONS 180 5. POLICY RECOMMENDATIONS ON SUKUK MARKET DEVELOPMENT 182 5.1 STRATEGIC FRAMEWORK AND ROAD MAP TO DEVELOP SUKUK MARKETS 182 5.2 GENERAL RECOMMENDATIONS IN DEVELOPING A VIBRANT SUKUK MARKET 185 6. CONCLUSION 190 6.1 SUKUK STRUCTURES 190 6.2 SUKUK ISSUANCES (SUPPLY – SELL SIDE) 192 6.3 SUKUK INVESTMENTS (DEMAND – BUY SIDE) 193 REFERENCES 195 APPENDIX 1: ACKNOWLEDGEMENT 204 APPENDIX 2: SURVEY RESULTS 206 iv LIST OF TABLES Table 1: Stage of Sukuk Market Development by Case-Study Countries 2 Table 1.1: Case-Study Countries by Category of Sukuk Market Development 7 Table 1.2: Case-Study Countries by Regional Location 7 Table 2.1: Comparison between Bonds, Sukuk and Shares 12 Table 2.2: Required Parties in Sukuk Issuances and Their Roles 23 Table 2.3: Optional Parties in Sukuk Issuances and Their Roles 24 Table 2.4: Asset-Based and Asset-Backed Sukuk 28 Table 2.5: Tax Changes to Promote Sukuk 31 Table 3.1: Facilitative Roles of Key Market Stakeholders 37 Table 3.2: Shariah Contracts under AAOIFI Shariah Standards on Investment Sukuk 41 Table 3.3: A Snapshot of Sovereign Ijarah Sukuk Issuances by Selected Non-OIC Countries 50 Table 3.4: GCC Countries’ Budget Deficits (2014-2017f/ USD billion) 54 Table 3.5: Arab Countries – Number of Domestic Sukuk Issuances by Country (2001-2016) 54 Table 3.6: Arab Countries – Number of International Issuances by Country (2001-2016) 55 Table 3.7: A Snapshot of Selected Sukuk Issuances by Arab Countries 55 Table 3.8: Asian Countries − Number of Domestic Sukuk Issuances by Country (2001-2016) 57 Table 3.9: Asian Countries – International Sukuk Issuances by Country (2001-2016) 57 Table 3.10: A Snapshot of Selected Sukuk Issuances by Asian Countries 58 Table 3.11: A Snapshot of Selected Sukuk Issuances by African Countries 60 Table 3.12: Number of Domestic Sukuk Issuances by Country (2001-2016) 61 Table 3.13: Number of International Sukuk Issuances by Country (2001-2016) 61 Table 3.14: Composition of Financial Markets by Country as a Percentage of GDP 63 Table 3.15: Key Indicators of Financial Intermediation by NBFIs as a Percentage of GDP 63 Table 3.16: Composition of Selected Asian Financial Markets as a Percentage of GDP 65 Table 3.17: Key Indicators of Financial Intermediation by NBFIs as a Percentage of GDP 65 Table 3.18: Composition of Selected African Financial Markets as a Percentage of GDP 68 Table 3.19: Key Indicators of Financial Intermediation by NBFIs as a Percentage of GDP 68 Table 4.1: Development-Stage Matrix for Sukuk 70 Table 4.2: Description of the Development-Stage Matrix 72 Table 4.3: Malaysia’s Budget Deficits (2014–2017f) 79 Table 4.4: A Snapshot of Benchmark Corporate Sukuk Issuances in Malaysia 84 Table 4.5: Malaysian Institutional Investors 87 Table 4.6: Recommendations to Improve Demand (Buy Side) – Medium-Term Solutions 94 Table 4.7: Recommendations to Improve Demand (Sell Side) – Medium-Term Solutions 94 Table 4.8: UAE’s Budget Deficits (2014–2017f) 102 Table 4.9: A Snapshot of Benchmark Corporate Sukuk Issuances in the UAE 105 Table 4.10: Key Laws for the Establishment of the DIFC 109 Table 4.11: Recommendations to Improve Demand (Buy Side) – Medium-Term Solutions 113 Table 4.12: Recommendations to Improve Supply (Sell Side) – Medium-Term Solutions 113 Table 4.13: Indonesia’s Budget Deficits (2014–2017f)
Load more

Recommended publications
  • The Development of the Global Sukuk Market from an Indexing Perspective
    Index Education The Development of the Global Sukuk Market from an Indexing Perspective The global sukuk market has enjoyed tremendous growth since 2013. As Contributor measured by the Dow Jones Sukuk Total Return Index and the S&P Global Jason Giordano High Yield Sukuk Index, the U.S. dollar-denominated sukuk market Director experienced a compound annualized growth rate of nearly 18%, driven by Fixed Income Product increased issuance from sovereigns and supranationals, as well as strong Management investor demand for Shariah-compliant securities. Historically, the majority [email protected] of issuance has come from Saudi Arabia and Malaysia; however, the past three years have witnessed an increasing number of issuers from new markets, as well as a deeper and broader investor base. Exhibit 1: Growth of the Global Sukuk Market 100 90 80 70 60 USD Billions USD 50 40 30 20 October 2013 October 2014 October 2015 October 2016 October 2017 October 2018 October 2019 October Dow Jones Sukuk Index (Investment Grade) S&P Global High Yield Sukuk Index Source: S&P Dow Jones Indices LLC. Data as of October 2019. Past performance is no guarantee of future results. Chart is provided for illustrative purposes and reflects hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with back-tested performance. This article was first published in Islamic Finance news Investors Report 2020. Register to receive our latest research, education, and commentary at on.spdji.com/SignUp. The Development of the Global Sukuk Market from an Indexing Perspective February 2020 The recent growth of the global sukuk market is likely to accelerate, as GCC issuers are poised to refinance in order to fund increasing deficits and The global sukuk as new entrants continue to come to market.
    [Show full text]
  • Implementation of the Gold Dinar: Is It the End of Speculative Measures?
    Journal of Economic Cooperation 23 , 3 (2002) 71-84 IMPLEMENTATION OF THE GOLD DINAR: IS IT THE END OF SPECULATIVE MEASURES? Dr. Abu Bakar Bin Mohd Yusuf * Nuradli Ridzwan Shah Bin Mohd Dali* Norhayati Mat Husin* The Asian economic crisis, which occurred in 1997, hit the Malaysian and neighbouring countries economies badly. Thailand and South Korea had to turn to IMF rehabilitation funds to ensure that they could revive their economic growth. Suprisingly, Malaysia took an unorthodox way by implementing capital control and pegging the National Ringgit Malaysia at 3.80 to the US dollar. Prime Minister Dato Seri Dr. Mahathir Mohamad blames speculators which contributed heavily to the country's depreciating currency value, thus affecting the overall national economic condition. Even though the SEA countries are feeling the pain from the crisis, their overall economic conditions are moving towards positive reactions after several economic measures have been taken by the affected countries. In the process of economic recovery, Malaysia is searching for an alternative solution to decrease the possibilities of being attacked by speculators. Prime Minister Dato Seri Dr. Mahathir Mohamad first expressed interest in a universal currency that could help unite Muslim countries after attending the OIC summit in Doha, Qatar, in November 2000. This paper will discuss whether the implementation of the universal currency, or the Gold Dinar will stop the speculators’ menace. 1. OVERALL FINANCIAL CRISIS Asia was slashed down by the international financial crisis which spread to other continents. Consequently, efforts to strengthen the architecture of the international financial system, involving finance ministries and central banks from both developed and emerging market economies, have been made.
    [Show full text]
  • Treasury Reporting Rates of Exchange As of March 31, 1965
    iA-a 1902 (lTlslon of Central Account* and Reports ipproTed 10/63 TREASURY REPORTING RATES OF EXCHANGE AS OF MARCH 31, 1965 TREASURY DEPARTMENT FISCAL SERVICE BUREAU OF ACCOUNTS TREASURY REPORTING RATES OF EXCHANGE AS OF MARCH 31, 1965 Prescribed pursuant to section 613 of P.L. 87-195 and section 4a(3) of Procedures Memorandum No. 1, Treasury Circular No. 930, for pur­ poses of reporting, with certain exceptions, foreign currency bal­ ances as of March 31, 1965 and transactions for the quarter ending June 30, 1965. RATES OF EXCHANGE COUNTRY F.C. TO &1.00 TYPE OF CURRENCY Aden 7.119 East African shillings Afghanistan 65.00 Afghan afghanis Algeria 4.900 Algerian dinars Argentina 149.5 Argentine pesos Australia .4468 Australian pounds Austria 25.74 Austrian schillings Azores 28.68 Portuguese escudos Bahamas .3574 Bahaman pounds Belgium 49.62 Belgian francs Bermuda .3577 Bermudian pounds Bolivia 11.88 Bolivian pesos Brazil 1825. Brazilian cruzeiros British Honduras 1.430 British Honduran dollars British West Indies 1.714 British West Indian dollars Bulgaria 2.000 Bulgarian leva Burma 4.725 Burmese kyats Cambodia 34.49 Cambodian riels Canada 1.075 Canadian dollars Ceylon 4.758 Ceylonese rupees Chile 3.410 Chilean escudos China (Taiwan) 40.00 New Taiwan dollars Colombia 13.85 Colombian pesos Congo, Republic of the 150.0 Congolese francs Costa Rica 6.620 Costa Rican colones Cyprus .3568 Cyprus pounds Czechoslovakia 14.35 Czechoslovakian korunas Dahomey 245.0 C.F.A. francs Denmark 6.911 Danish kroner Dominican Republic 1.000 Dominican Republic pesos Ecuador 18.47 Ecuadoran sucres El Salvador 2.500 Salvadoran colones Ethiopia 2.481 Ethiopian dollars Fiji Islands -3935 Fijian pounds Finland 3.203 Finnish new markkas France 4.900 French francs French West Indies 4.899 French francs Page 1 TREASURY REPORTING RATES OF EXCHANGE AS OF MARCH 31, 1965 (Continued) RATE OF EXCHANGE COUNTRY F.C.
    [Show full text]
  • View Currency List
    Currency List business.westernunion.com.au CURRENCY TT OUTGOING DRAFT OUTGOING FOREIGN CHEQUE INCOMING TT INCOMING CURRENCY TT OUTGOING DRAFT OUTGOING FOREIGN CHEQUE INCOMING TT INCOMING CURRENCY TT OUTGOING DRAFT OUTGOING FOREIGN CHEQUE INCOMING TT INCOMING Africa Asia continued Middle East Algerian Dinar – DZD Laos Kip – LAK Bahrain Dinar – BHD Angola Kwanza – AOA Macau Pataca – MOP Israeli Shekel – ILS Botswana Pula – BWP Malaysian Ringgit – MYR Jordanian Dinar – JOD Burundi Franc – BIF Maldives Rufiyaa – MVR Kuwaiti Dinar – KWD Cape Verde Escudo – CVE Nepal Rupee – NPR Lebanese Pound – LBP Central African States – XOF Pakistan Rupee – PKR Omani Rial – OMR Central African States – XAF Philippine Peso – PHP Qatari Rial – QAR Comoros Franc – KMF Singapore Dollar – SGD Saudi Arabian Riyal – SAR Djibouti Franc – DJF Sri Lanka Rupee – LKR Turkish Lira – TRY Egyptian Pound – EGP Taiwanese Dollar – TWD UAE Dirham – AED Eritrea Nakfa – ERN Thai Baht – THB Yemeni Rial – YER Ethiopia Birr – ETB Uzbekistan Sum – UZS North America Gambian Dalasi – GMD Vietnamese Dong – VND Canadian Dollar – CAD Ghanian Cedi – GHS Oceania Mexican Peso – MXN Guinea Republic Franc – GNF Australian Dollar – AUD United States Dollar – USD Kenyan Shilling – KES Fiji Dollar – FJD South and Central America, The Caribbean Lesotho Malati – LSL New Zealand Dollar – NZD Argentine Peso – ARS Madagascar Ariary – MGA Papua New Guinea Kina – PGK Bahamian Dollar – BSD Malawi Kwacha – MWK Samoan Tala – WST Barbados Dollar – BBD Mauritanian Ouguiya – MRO Solomon Islands Dollar –
    [Show full text]
  • The Law of Islamic Finance in the United Kingdom: Legal Pluralism and Financial Competition
    Ercanbrack, Jonathan G (2011) The Law of Islamic Finance in the United Kingdom: Legal Pluralism and Financial Competition . PhD Thesis, SOAS (School of Oriental and African Studies) http://eprints.soas.ac.uk/13598 Copyright © and Moral Rights for this thesis are retained by the author and/or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder/s. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. When referring to this thesis, full bibliographic details including the author, title, awarding institution and date of the thesis must be given e.g. AUTHOR (year of submission) "Full thesis title", name of the School or Department, PhD Thesis, pagination. THE LAW OF ISLAMIC FINANCE IN THE UNITED KINGDOM: LEGAL PLURALISM AND FINANCIAL COMPETITION BY JONATHAN G. ERCANBRACK SCHOOL OF LAW SCHOOL OF ORIENTAL AND AFRICAN STUDIES (SOAS) UNIVERSITY OF LONDON THESIS SUBMITTED FOR THE PHD IN LAW 15 SEPTEMBER 2011 1 DECLARATION FOR PHD THESIS I have read and understood regulation 17.9 of the Regulations for students of the School of Oriental and African Studies concerning plagiarism. I undertake that all the material presented for examination is my own work and has not been written for me, in whole or in part by any other person. I also undertake that any quotation or paraphrase from the published or unpublished work of another person has been duly acknowledged in the work which I present for examination.
    [Show full text]
  • Emerging Trends in Sukuk Offerings
    Chicago Journal of International Law Volume 7 Number 2 Article 5 1-1-2007 New Horizons for Islamic Securities: Emerging Trends in Sukuk Offerings Ayman H. Abdel-Khaleq Christopher F. Richardson Follow this and additional works at: https://chicagounbound.uchicago.edu/cjil Recommended Citation Abdel-Khaleq, Ayman H. and Richardson, Christopher F. (2007) "New Horizons for Islamic Securities: Emerging Trends in Sukuk Offerings," Chicago Journal of International Law: Vol. 7: No. 2, Article 5. Available at: https://chicagounbound.uchicago.edu/cjil/vol7/iss2/5 This Article is brought to you for free and open access by Chicago Unbound. It has been accepted for inclusion in Chicago Journal of International Law by an authorized editor of Chicago Unbound. For more information, please contact [email protected]. New Horizons for Islamic Securities: Emerging Trends in Sukuk Offerings Ayman H. Abdel-Khaleq* and Christopher F. Richardson** I. INTRODUCTION Shari'ah-compliant finance and investment products are fast becoming part of the mainstream of the world economy as Muslim money is increasingly integrated into global capital markets and, generally, the commercial finance system. Once largely restricted to the Middle East and Southeast Asia, Islamic finance and investment now permeate markets throughout Europe, Asia, and even the US. As a number of countries in the Islamic world, emboldened by sustained increases in commodity prices and higher levels of foreign direct investment, look beyond traditional borders for investment opportunities, new forms of Islamic finance and investment have emerged. Perhaps the most significant recent development has been the emergence of sukuk (which roughly translates to "certificates")-in essence an asset-backed security structured in compliance with the precepts of Shari'ah, somewhat similar to a trust certificate or bond.
    [Show full text]
  • Sukuk in Focus the Necessity for Global Common Practices Deloitte Islamic Finance Insights Series Leading by Engaging
    Sukuk in focus The necessity for global common practices Deloitte Islamic Finance Insights Series Leading by engaging Sukuk in focus | The necessity for global common practices Contents 04 05 06 07 Foreword from Deloitte Foreword from ISRA Acknowledgments Executive summary 09 10 12 17 Introduction: Strategic Shariah governance and Practice and market Regulatory capabilities and practice approach sustainability institutions market development 40 41 Sustainability in focus Thinking further ahead: Practice and policy considerations 03 Sukuk in focus | The necessity for global common practices Foreword from Deloitte Dear Islamic finance practitioners, For Islamic finance practitioners, this will require re-thinking and re-modelling of For nearly two decades, many financial their governance frameworks and regulators and investment institutions business operating channels. Most around the world have been committed importantly, practitioners need to harness to strengthening practices in Islamic their Islamic finance corporate culture capital markets, and leverage standards and embrace a ‘back to basics’ approach for Sukuk as a key investment asset class. and adhere to designing products and Embedded within this has been an services in line with the ‘equity-base’ equally strong commitment from industry differentiator to fund real economy standards setters and other business projects. supporting institutions (BSIs) to address practice differences and inconsistency. Clearly, this can be streamlined in the first place, with Maqasid Al Shariah, which It is with great pleasure that we produce reflects values and practices of social and Dr. Hatim El Tahir, FCISI this report, and put forward our thoughts economic inclusion and sustainable Director, Islamic Finance Group on a number of business practices community development.
    [Show full text]
  • Resolutions of the Shariah Advisory Council of the SC
    RESOLUTIONS OF THE SHARIAH ADVISORY COUNCIL OF THE SECURITIES COMMISSION MALAYSIA 31 December 2020 Resolutions of the Shariah Advisory Council of the Securities Commission Malaysia Resolutions of the Shariah Advisory Council ii of the Securities Commission Malaysia CONTENTS PART A 2 INTRODUCTION AND OBJECTIVES PART B 3 RESOLUTIONS OF THE SHARIAH ADVISORY COUNCIL OF THE SECURITIES COMMISSION MALAYSIA PRINCIPLES AND CONCEPTS OF MUAMALAT IN THE ISLAMIC CAPITAL MARKET 1. Ta`widh 4 2. Bai` `Inah (i) Implementation of Bai` `Inah 8 (ii) Implementation of Resolution on Bai` `Inah in Sukuk Structuring 12 3. Ibra’ 14 4. Wa`d and Muwa`adah 16 5. Tawarruq 20 6. `Aqd al-Tawrid 21 ISLAMIC CAPITAL MARKET PRODUCTS 7. Nature of Shares 25 8. Crude Palm Kernel Oil Futures Contract (FPKO) 26 9. Single Stock Futures (SSFs) Contract 27 10. Islamic Business Trusts 29 11. Islamic Exchange-Traded Fund Based on Gold and Silver 31 12. Stapled Securities 34 Resolutions of the Shariah Advisory Council iii of the Securities Commission Malaysia 13. Issuance of Redeemable Convertible Unsecured Islamic Debt 35 Securities (RCUIDS) with Free detachable Warrants Based on Shariah Principle of Murabahah (via Tawarruq Arrangement) 14. Islamic Securities Selling and Buying-Negotiated Transaction (iSSB- 39 NT) Model 15. Islamic Real Estate Investment Trusts (Islamic REIT) 40 SHARIAH ISSUES IN RELATION TO THE ISLAMIC CAPITAL MARKET TYPES OF IJARAH 16. Ijarah Mudhafah Ila Mustaqbal 54 17. Ijarah Mawsufah Fi Zimmah 56 18. Ijarah Muntahiyah Bi Tamlik 58 19. Sublease 60 20. Implied Sublease 61 IJARAH ASSET 21. Asset and Usufruct as Mahal al-`Aqd in Ijarah Contract 63 22.
    [Show full text]
  • Countries Codes and Currencies 2020.Xlsx
    World Bank Country Code Country Name WHO Region Currency Name Currency Code Income Group (2018) AFG Afghanistan EMR Low Afghanistan Afghani AFN ALB Albania EUR Upper‐middle Albanian Lek ALL DZA Algeria AFR Upper‐middle Algerian Dinar DZD AND Andorra EUR High Euro EUR AGO Angola AFR Lower‐middle Angolan Kwanza AON ATG Antigua and Barbuda AMR High Eastern Caribbean Dollar XCD ARG Argentina AMR Upper‐middle Argentine Peso ARS ARM Armenia EUR Upper‐middle Dram AMD AUS Australia WPR High Australian Dollar AUD AUT Austria EUR High Euro EUR AZE Azerbaijan EUR Upper‐middle Manat AZN BHS Bahamas AMR High Bahamian Dollar BSD BHR Bahrain EMR High Baharaini Dinar BHD BGD Bangladesh SEAR Lower‐middle Taka BDT BRB Barbados AMR High Barbados Dollar BBD BLR Belarus EUR Upper‐middle Belarusian Ruble BYN BEL Belgium EUR High Euro EUR BLZ Belize AMR Upper‐middle Belize Dollar BZD BEN Benin AFR Low CFA Franc XOF BTN Bhutan SEAR Lower‐middle Ngultrum BTN BOL Bolivia Plurinational States of AMR Lower‐middle Boliviano BOB BIH Bosnia and Herzegovina EUR Upper‐middle Convertible Mark BAM BWA Botswana AFR Upper‐middle Botswana Pula BWP BRA Brazil AMR Upper‐middle Brazilian Real BRL BRN Brunei Darussalam WPR High Brunei Dollar BND BGR Bulgaria EUR Upper‐middle Bulgarian Lev BGL BFA Burkina Faso AFR Low CFA Franc XOF BDI Burundi AFR Low Burundi Franc BIF CPV Cabo Verde Republic of AFR Lower‐middle Cape Verde Escudo CVE KHM Cambodia WPR Lower‐middle Riel KHR CMR Cameroon AFR Lower‐middle CFA Franc XAF CAN Canada AMR High Canadian Dollar CAD CAF Central African Republic
    [Show full text]
  • World Bank Document
    FILE COPY o RE§UtED 10 R lDOCUMENTO;NTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Not For Public Use Public Disclosure Authorized Report No. P-1612a-YU REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN Public Disclosure Authorized TO REPUBLISKA SKUPNOST ZA CESTE S.R. SLOVENIJE (Republic Community for Roads of the Socialist Republic of Slovenia) ZAJEDNICA PREDUZECA ZA PUTEVE S.R. SRBIJE (Association of Enterprises for Roads of the Socialist Republic of Serbia) and REPUBLISKA SAMOUPRAVNA INTERESNA ZAJEDNICA ZA PUTEVE S.R. CRNE GORE (Self-Managing Republic Interest Community for Roads of-the Socialist Republic of Montenegro) Public Disclosure Authorized WITH THE GUARANTEE OF THE SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA FOR A SEVENTH HIGHWAY PROJECT June 25, 1975 Public Disclosure Authorized This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY EQUIVALENTS * Currency Unit Yugoslav Dinar (Din.) US$1 Din. 16.00 Din. 1 us$o.0625 Din. 1,000 US$62.50 Din. 1,000,000 US$62,500.00 * The Yugoslav Dinar has been floating since July 13, 1973. The currency equivalents given above are as of September 30, 197h. The Yugoslav Central Bank established on October 29, 1974 a new intervention rate of US$1.00 equal to Dinars 17.23. Fiscal Year January 1 to December 31 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO REPUBLISKA SKUPNOST ZA CESTE S.R.
    [Show full text]
  • Takaful International Company B.S.C
    Takaful International Company B.S.C. FINANCIAL STATEMENTS 31 DECEMBER 2020 Takaful International Company B.S.C. CONTENTS Page General information 2 Directors and management 3 Directors' report 4-6 Independent auditors' report to the shareholders 7 to 12 Financial statements Statement of financial position 13 Statement of income 14 Statement of changes in owners' equity 15 Statement of changes in participants' fund 16 Statement of cash flows 17 to 18 Notes to the financial statements 19 to 63 Supplementary disclosure to the financial statements 64 to 66 1 Takaful International Company B.S.C. General information HEAD OFFICE Building 680, Road 2811, P.O. Box : 3230 Seef District 428, Telephone : +973 17565656 Kingdom of Bahrain Telefax : +973 17582688 E-mail : [email protected] Website : www.gigtakaful.bh Commercial registration : 21100 obtained on 11 April 1989 SEEF MALL MUHARRAQ BRANCH Shop 5, Building 154 P.O. Box : 3230 Road 29, Arad 240 Telephone : +973 17565451 Kingdom of Bahrain JERDAB BRANCH Building 771G Road 77 P.O. Box : 3230 Jerdab 729 Telephone : +973 17565444 Kingdom of Bahrain Telefax : +973 17484390 SAAR MALL BRANCH Kiosk - 24 Building 133 P.O. Box : 3230 Road 25, Saar 525 Telephone : +973 17565447 Kingdom of Bahrain REEM CENTER BRANCH Shop A0013 Abu Shaheen Avenue P.O. Box : 3230 Riffa/BU Kuwarah Telephone : +973 17565448 Southern Governorate Kingdom of Bahrain PRINCIPAL BANKERS Bahrain Islamic Bank Al Salam Bank SHARE REGISTRAR Bahrain Bourse P.O. Box : 3203 Manama, Telephone : +973 17108781 Kingdom of Bahrain Telefax : +973 17256362 AUDITORS Ernst & Young P.O. Box : 140 Manama, Kingdom of Bahrain Telephone : +973 17535455 Kingdom of Bahrain Telefax : +973 17535405 Actuary Lux Actuaries & Consultants P.O.
    [Show full text]
  • Sukuk Bond: the Global Islamic Financial Instrument
    Munich Personal RePEc Archive Sukuk Bond: The Global Islamic Financial Instrument Shaikh, Salman and Saeed, Shan 1 November 2010 Online at https://mpra.ub.uni-muenchen.de/26700/ MPRA Paper No. 26700, posted 16 Nov 2010 05:48 UTC SUKUK BOND: The Global I slamic Financial I nstrument Salman Ahmed Shaikh1 & Shan Saeed2 Abstract Global financial markets are volatile right now and will remain so for the next 2-years. Equity markets are shaky. Investors risk appetite is suddenly moving to commodities. Bond market is precarious as Sovereign debt risk goes high. Global economy is slowly moving into recession which will be either U or W-Shaped. Recovery figures are questionable and are creating doubts among investors. So, where are we heading towards? As we navigate through treacherous times, Islamic financial market provides a new hope without speculation and exploitation of resources. The emergence of Sukuk Islamic Bond in the financial markets heralds a new era which can provide much needed financial stability and mitigation of risk in these arduous times. With advent of Sukuk in the financial world, the market players have got a new option to invest into this asset which hold considerable value and benefit for all. This bond promises to all investors an equitable return which is justifiable and above all safe for the strategic investment purpose. 1. Background Global financial markets are volatile right now and will remain so for the next 2-years. Equity markets are shaky. Investors risk appetite is suddenly moving to commodities. Bond market is precarious as Sovereign debt risk goes high.
    [Show full text]