The Shari'ah perspective on sukuk assets: dynamics of fiqhi opinions
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The sukuk market is one of the fastest growing sectors in Islamic finance, with total sukuk outstanding valued at more than USD330 billion in the first quarter of 2016. The industry has witnessed evolution in the issuance of landmark and innovative structures: ranging from plain vanilla to more complex and hybrid structures such as convertible and exchangeable sukuk that allow investors to tap into the equity of reference companies; from short- to medium- to long-term and perpetual sukuk to meet the funding requirements of issuers; and from sovereign to corporate and retail sukuk to cater to the appetites of different classes of issuers and investors. Recently, more sukuk have been structured as a subordinated instrument to meet the regulatory capital requirement of Islamic banks and as a sustainable and responsible investment (SRI) tool to promote socially responsible financing and investment. Regardless of the technical and commercial features of sukuk, all structures must comply with the Shari'ah requirements, particularly those of underlying assets that back the issuance. This article narrates the dynamics of fiqhi opinions on sukuk assets based on the historical timeline of issuance starting from the first corporate sukuk by Shell MDS Malaysia in 1990 until the current development.
Sukuk , Islamic finance , Shari'ah
Muhammad, Marjan and Sairally, Beebee Salma. (2017). Ths Shari'ah perspective on sukuk assets: dynamics of fiqhi opinions. In Baharom Abdul Hamid, Mansor H. Ibrahim & Sazalina Kamarudin (Eds.), Islamic finance: the new normal (pp. 284-292). Kuala Lumpur, Malaysia: RAM Holdings Berhad.
RAM Holdings Berhad