It is apparent that the contemporary era denotes the Islamic capital markets recognizing the issuance of Shari’a-compliant financial instrument called as Sukuk (Godlewski, Turk-Ariss, & Weill, 2011). From a business perspectives, the term Sukuk refers to securities that conform to the Shari’a as well as to investment principles, which likely prohibits the various Shari’a laws stated such as the riba or paying or accepting interests (Shaikh & Saeed, 2010). According to the Accounting and Auditing Organization for Islamic Financial Institutions or AAOIFI, Sukuk are certificates of equal value representing undivided shares in the ownership of tangible assets, usufructs and services or (in the ownership of) the assets of particular projects or special investment activity (Bi, 2008). The Sukuk market, in particular, has experienced extensive growth and development in global scale by which it is applied a best approach of financial intermediation. The Sukuk market had dominated widely by the Government debt securities which manifests the increasing need for continuing and long-standing financing requirement of the private sector. More so, it proved to be of great importance in its role during an economic downturn (Zin, Hashim, Khalid, Opir, & Sulaiman, 2011).
The growing demand of Sukuk issuance has been a significant trend in global financial system, having to consider that Sukuk, by its context, posts favorable benefits and characteristics. As noted by Mohamed (2008), benefits of sukuk basically reflects to the fact that sukuk are tradable which provides a long-term fixed or variable percentage of return. More so, it is also considered that sukuk is tradable in secondary markets...
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...et, by which price encompasses the cost of the asset in addition to an agreed profit margin for the seller (Jamaldeen, n.d). In such cases, the issuer of the contract is the seller of the Murabahah product or commodity and the subscribers are the buyers of those particular goods. These subscribers are entitled to its agreed sale price upon the re-sale of the commodity. To note, a Murabahah Sukuk is could not be bought and sold at the secondary market, and the certification signifies a liability owing from the subsequent buyer of the commodity to the Sukuk holders. This is because the Shari’a Law stressed that that it is not permissible to trade in debt on delayed basis (Zin, Hashim, Khalid, Opir, & Sulaiman, 2011). Figure 8 shows the structure and execution timeline of Murabahah Sukuk issuance, as applied by a Malaysian National mortgage corporation, Cagamas.
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