A critical review of the Sukuk market : a qualitative study to identify current risks and opportunities
Authors
Abdo, Alaa
Issue Date
2014
Degree
MBA in Finance
Publisher
Dublin Business School
Rights holder
Rights
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Abstract
Over the past few decades, Islamic financial system has witnessed a tremendous growth. One of the most creative products of this system is the sukuk, which is usually known as Islamic bonds, or Islamic debt certificates. These instruments represent one of the fastest growing products in the global investments landscape nowadays. However, despite its enormous expansion, Sukuk issuance still faces different kinds of restrictions that distract and stand in the way of the market development. This might be due to its complicated nature and the inconvenient environment of the market where the regulations haven’t support these special products nor appreciated their distinguishing features. This research aims to explore how the sukuk could exploit the potentials within such an increasingly competitive International market. The mechanics of Sukuk structure and the background of these interesting financial instruments will be critically discussed. The research will also highlight the obstacles that have hindered the growth of Sukuk issuance in the last few years. Finally, the researcher also aims to highlight the risks, challenges and limitations of the sukuk, in the hope to support sukuk issuers in their optimizing of how to take their chances inwards the great growing investors' interest in the sukuk market, where there is a massive gab between sukuk demand and supply. Author keywords: Sukuk, Sukuk risk, Sukuk challenges, Sukuk opportunities, Islamic investments, Islamic financial instruments