Sukuk

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Sukuk (Arabic: ???? ? ? uk? k , plural of ?? i>? akk , "legal instruments, deeds, checks") is the Arabic name for financial certificates, also commonly referred to as "shariah compliant" bonds. Sukuk is defined by AAOIFI (Organization of Accounting and Audit for Islamic Financial Institutions) as "the same denominational securities represent individual ownership interests in an existing or qualified asset portfolio." The Fiqh Academy from OKI authorized the use of sukuk in February 1988.

Sukuk is developed as an alternative to conventional bonds that are not considered to be allowed by many Muslims because they pay interest and can finance businesses that engage in unlawful activities (gambling, alcohol, pigs, etc.). The Sukuk Securities are structured to comply with Sharia by paying profit, not interest - generally by involving tangible assets in investments. For example, Sukuk securities may have a partial ownership of the property built by an investment company (and kept in a Special Purpose Vehicle), so the sukuk holder may collect property gains as rent, (permitted under Islamic law). Since they represent the ownership of tangible assets and (at least in theory) does not guarantee the initial investment payout, the sukuk resembles an equity instrument, but like bonds (and unlike equities) routine payments stop after expiration. However, most sukuk are "asset-based" rather than "asset-supported" - their assets are not actually owned by their Special Purpose Vehicle, and their holder asks for assistance to the originator if there is a lack of payment.

The different types of sukuk are based on different structures of Islamic contracts (Murabaha, Ijara, Istisna, Musharaka, Istithmar, etc.) depending on the sukuk project is the financing.

According to the 2016/17 Global Islamic Economic Report, of $ 2.004 trillion of assets administered in a shariah-compliant manner by 2015, $ 342 billion is a sukuk, consisting of 2,354 sukuk issues.

In general use outside Arabic-speaking countries, the word "sukuk" is often used both as singular and plural. (In Arabic, "sukuk" is plural, "sakk" is singular.)

Video Sukuk

Histori

In the classical period of Islam, Sakk (sukuk) means any document representing the contract or the transfer of rights, obligations or money made in accordance with the Shariah. The term is used to refer to a paper form that represents financial obligations derived from trade and other commercial activities in the pre-modern period of Islam.

According to Camille Paldi, the first sukuk transaction took place in Damascus at the Grand Mosque in the 7th century. Muslim traders are known to have used a check system or ? Akk since the time of Harun al-Rashid (9th century) of the Abbasid Caliphate.

The modern Western word "check" appears to be derived from " sakk ", which during the Middle Ages referred to a written agreement "to pay for goods when they were shipped" and used to "avoid the money must be transported in a dangerous field".

Modern

Answering the need to provide short and medium term instruments so that the balance sheet of Islamic finance institutions could be more fluid, the Fiqh academy of the OIC (Organization of Islamic States) legitimized the use of sukuk in February 1988.

In 1990, one of the first contemporary sukuks - worth RM125 million - was issued by Malaysia Shell MDS Sdn Bhd, on the basis of bai 'bithaman ajil . No other sukuk was issued until 2000 when the market began to take off. In 2000, the Sudanese government issued a country's short-term sukuk worth 77 million pounds of Sudan on the basis of musharaka . In 2001, the sukuk market went international with the first denomination of US $ 100 million denominated denomination, $ 100 million by the Central Bank of Bahrain. Since then many state and corporate sukuk issues have been offered in various jurisdictions.

To standardize emerging markets, AAOIF issued "Shari'ah Standard No.17" on 'Sukuk Investasi' in May 2003. Effective from 1 January 2004.

Maps Sukuk

Industry

In early 2017, there was a sukuk worth US $ 328 billion circulating around the world. Until the end of 2016, there are about 146 securities issued in US dollars and published in global markets, which are the level of investment, and have a duration of at least one year. These securities - which form the Citi Sukuk Index - have an average maturity of 4.54 years, and most are issued by the government. The top four listed companies based on market weight - which control over 40% of the market - are: ISLAMIC DEVELOPMENT BANK, FINANCIAL ISSUANCE OF SBSN INDOIII, SAUDI ELECTRICITY CO, SOQ A QSC. About 3/4 sukuk market is domestic, not international. However, most sukuk are not the level of investment, and by 2015, there are a total of 2,354 sukuk issues, including domestic, non-global sukuk, according to Thomson Reuters & Standard Dinar. According to the Malaysia International Islamic Finance Center, in 2013, the largest issuer of sukuk is the government (65.6%), and the second largest is utility and utility companies (13.6%).

Secondary market

The effects of sukuk tend to be bought and held. As a result, some securities enter the secondary market for trading. Furthermore, only public Sukuk can enter this market, as they are listed on the stock exchange.

Secondary markets - while developing - remain a niche segment with almost all trade done at the institutional level. The size of the secondary market is still unknown, although the Bahraini LMC stated that they traded a $ 55.5 million Sukuk in 2007. As of July 2014, Sukuk.com listed fifteen sukuks in the secondary market for the Sukuk Gulf.

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Principles

Ali Arsalan Tariq stated that Islamic finance - including sukuk - is based on a series of several restrictions:

1. Transactions in unethical goods and services;
2. Produce the proceeds of the loan contract (Riba/Bunga);
3. Restructuring debt-based compensation;
4. Excessive uncertainty in contract ( Gharar );
5. Gambling games and opportunity-based games ( Qimar );
6. Trading in debt contracts with discounts, and;
7. Forward foreign exchange transactions.

Since the Shari'ah considers money as a measuring instrument for value and not the asset itself, it requires that one should not receive income from money (or anything that owns the money genus) itself, for this (simplistically, interest) is " > usury ", and forbidden. From a Syariah perspective, the debt certificate can not be traded except at face value (although different views are held by many people in Malaysia).

While a bond is a contractual debt obligation of the issuer to pay to the bondholder, on a specified date, interest and principal; Sukuk is a certificate that gives the proprietor an undivided shareholding interest in the underlying asset. As a result, the Sukuk holders are entitled to share the revenue generated by the Sukuk assets and are entitled to share the proceeds from the realization of the Sukuk assets.

Equation with bond

• Sukuk and bonds are sold to investors who receive a payment stream until the date of maturity of sukuk or bond, when they get their initial investment (in case of full payment is not guaranteed) back.
• Sukuk and bonds are intended to provide investments with less risk than equity (such as stocks) and are often used to "balance portfolios" of investment instruments.
• Both Sukuk and bonds must issue a disclosure document known as a prospectus to describe the security they are selling.
• To give investors an idea of ​​how many risks are involved in a particular sukuk/bond, the rating agency assesses the creditworthiness of the sukuk/bond issuer.
• Both sukuk and bonds are initially sold by the publisher. After that they (or some sukuk and bonds) can be bought and sold by brokers and agents, mostly on the over-the-counter (OTC) market, but also available in several stock exchanges around the world.

Differences from bond

• Ownership: Sukuk must show ownership of some assets. Bonds show debt obligations.
• Compliance: Assets in favor of sukuk must be in accordance with Sharia. Bonds only need to comply with the laws of the country/region in which they are issued.
• Price Determination: The face value of the sukuk is priced according to the value of the asset that supports it. Bond pricing is based on the credit rating, which is the issuer's credit worthiness.
• Rewards and risks: Sukuks can increase in value when assets increase in value. The return of the bonds corresponds to a fixed interest rate. (Since most bond interest rates are fixed, most increases in value when interest rates market falls.)
• Sales: When you sell sukuk, you sell ownership of the assets that support it. (In cases where the certificate is a debt to the holder, the certificate can not be traded in the secondary market and vice versa must be held to maturity.) Bond sales are debt sales.
• Principals: Sukuk investors (in theory) share the underlying asset risk and may not get all their initial investment (face value of sukuk) back. (The value paid to the Sukuk holders at maturity should be the current market value of the asset or company and not initially invested, according to Taqi Usamani.) Bond investors are guaranteed the return of their initial investment/principal. In practice some sukuk are issued under repurchase guarantee.
• Conventional bonds issued with underwriters. Sukuk may be the underwriter usually does not publish and may not be required. Sukuk uses a Special Purpose Vehicle to become a sukuk/sukuk issuer.

src: www.islamicfinance.com

Definitions, structure, and characteristics

Definitions

AAOIFI (The Accounting and Auditing Organization for Islamic Financial Institutions, the body issuing standards on accounting, auditing, governance, ethics, and sharia standards) defines Sukuk as "the same denominational securities representing individual ownership interests in an existing portfolio or asset future, "or" certificate of equal value representing an undivided portion of the ownership of tangible assets, results and services or (in ownership) of certain project assets or special investment activities. "

The Islamic Financial Services Board defines sukuk as

"The certificate with each sakk representing property rights is not proportional in tangible assets, or a collection of tangible assets, or a business venture.This asset may be in a particular project or investment activity in accordance with Sharia rules and principles.

The Malaysian Securities Commission defines sukuk as a document or certificate, representing the value of an asset.

Need

Shariah prohibits both trading of short-term debt instruments except at face value, and portraying the existing interbank money market (both seen as transactions involving excessive interest and uncertainty ( Gharar )). As a result, prior to the development of the sukuk market, the balance sheets of Islamic financial institutions tend to be highly illiquid and lack the short- and medium-term investment opportunities for their current assets.

Structure and characteristics

Sukuk is structured in several different ways. (AAOIFI has set 14 different sukuk types.) While conventional bonds are a promise to repay a loan, the sukuk is a partial shareholding in debt, assets, projects, business or investment. Debit

• ( the Murabaha Sukuk ). This sukuk is not common because their payments to investors are debt and therefore can not be traded or negotiated according to sharia. (If diluted with other non-cheap sukuks in a mixed portfolio, they can be traded).
• assets ( Sukuk Al Ijara ). This is basically a lease or rental contract, or a conventional rental-income bond. With this sukuk, the borrower's real assets are `sold` to the financiers and then` rented back 'to the borrower. The borrower then makes a regular payment back to the investor from the income stream generated by the asset. They are the most common type of sukuk (as of 2015), and have been described (by Faleel Jamaldeen) as famous for their simplicity, the ability to sell and the ability to provide a steady stream of income.
• future assets. ( Sukuk al-Salam ). In this sukuk, SPV does not buy assets but agrees to buy one in the future instead of prepayment. The asset is then sold in the future because of the cost plus the profit by the agent. On (or before) the date agreed upon in the contract, the seller provides the asset to the agent selling the resultant asset (minus cost/cost) to SPV, which distributes the proceeds to the sukuk holder. Sukuk al-Salam (at least usually) is used to support the short-term liquidity requirements of the company. The holder receives no payment with a regular income stream, but at maturity - similar to a coupon-free bond. An example of this type of sukuk is 91 days of CBB Sukuk Al-Salam issued by Bahrain's Central Bank.
• the project ( Sukuk Al Istisna ). This Sukuk is complex and can not be traded in the secondary market or sold to a third party at a price less than its nominal value.
Business
• ( Sukuk Al Musharaka ). The sukuk holder is also the owner of the originator who issued the sukuk and participated in the decision making. These sukuks can be traded in the secondary market.
• or investments ( Sukuk Al Istithmar ).

The most commonly used sukuk structure replicates the cash flow of conventional bonds. Such structures are listed on the exchange, usually the Luxembourg Stock Exchange and the London Stock Exchange in Europe, and are made to be traded through conventional organizations such as Euroclear or Clearstream. The main technique for achieving capital protection without a loan is a binding promise to repurchase a particular asset; for example in the case of Sukuk Al Ijara , by the publisher. Meanwhile, a lease is being paid, which often refers to the interest rate (LIBOR is the most common although its use is criticized by some Shariah Scholars).

The most accepted structure, which can be traded, is Sukuk Al Ijara . Debt certificates can only be purchased before the financial takes place and then held to maturity, from an Islamic perspective. It is very important to trade debt with market value without incurring a ban on usury (interest on money).

Publishing and payment process

The step-by-step process publishes sukuk by assets:

1. The originator - a business enterprise that needs capital - creates a vehicle with a specific purpose (SPV), an entity and an independent structure. SPV protects the sukuk asset from the creditor if the originator has financial problems. It determines what asset or sukuk activities will support, how big is the sukuk issuance, their face amount, interest rate, due date. SPV is often in "efficient tax jurisdictions" such as Bahrain, Luxembourg, or the Cayman Islands.
2. SPV issues a sukuk offering it for sale to investors with an agreement spelling out the relationship between the holder of the obligator and the sukuk (depending on the type of sukuk it can become a lessor and lessee, partner, etc.).
3. With the proceeds from the sale of sukuk certificates, SPV offers an offer to the originators who make purchases of assets, leases, joint ventures, etc. sharia (again depending on the type of sukuk).
4. SPV purchase assets (such as land, buildings, machinery) from the originators.
5. Sales proceeds are paid to the originator/debtor as asset price.
6. SPV, acting as trustee on behalf of the sukuk holder, arranges to lease the asset back to the originator who paid the sukuk holder of the rental income.
7. The creator repurchases the assets of the SPV at a nominal price on the termination of the lease.

In this type of sukuk, fixed interest on conventional bonds is replaced with fixed rental income. Islamic economist Muhammad Akram Khan complains that sukuk "differs from conventional finance in form and formality rather than substance", and "perhaps even more expensive" to the income provided than conventional bonds.

Example

An example of sukuk is the $ 100 million security used to finance the construction and delivery of a refrigeration plant in Abu Dhabi. This Sukuk has a istisna'a and ijara structure and was issued by Tabreed Financing Corporation (or National Central Cooling Company PJSC) in March 2004.

• Tabreed makes SPV (incorporated in the Cayman Islands), which sells bond certificates of sukuk.
• With the proceeds of this sale, he purchased some centralized central cooling center which was partly completed ("assets" held in trust for sukuk). (1)
• SPV leases the trust assets to Tabreed (2)
• who makes rental payments to SPV (3)
• which provides payment to the sukuk holder (4).
• When the sukuk matures the trust assets are repurchased from SPV and the sukuk holders regain their principal.

If some "disbanding event" (eg destruction of rented property) has disrupted lease payments, this will encourage "continuation of payment in the form of repurchase price". This reduces the sukuk's risk structure (or near it) of conventional bonds, allowing the sukuk to get the same or close to the same credit rating as obtained by conventional bonds. As a result, they can be sold at a lower interest rate appraiser than they may be, even though their transaction costs are higher than conventional bonds due to the creation of SPV, as well as the payment of various legal experts and legal fees for restructuring bond issuance.

src: www.sukuk.com

Challenges, criticisms, and controversies

Challenges

According to the IMF's 2015 report, the Sukuk supply, "failed to meet demand" and, with some exceptions "publishing takes place without a comprehensive strategy to develop the domestic market".

Sukuk are considered very suitable for infrastructure financing because their risk-sharing properties can also help fill the financing gap. National authorities should, therefore, focus on developing necessary infrastructure, including promoting proper securitization and enhancing investor rights clarity, and on improving the publication of sovereignty of the state to provide a benchmark for the private sector. Increased sovereign publishing should be supported by sound public financial management.

The "main challenges" for the Islamic finance industry as a whole - including sukuk - by 2016 include (according to Global Country Economic Report , 2015/16 and IMF) are

• "Low level" awareness and understanding of Islamic financial products and services among the people, making them not buying;
• "The scarcity of syariah-compliant monetary policy instruments" and a lack of understanding of "monetary transmission mechanisms"
• "Complex financial products and corporate structure" in some countries/jurisdictions because the "regulatory and supervisory framework" does not "address the unique risks of the industry". As a result, what is needed is "improved clarity and harmonization of regulations, better cooperation between Islamic and conventional financial standards, and further improvement of monitoring tools".
• "Uncertainty" of safety nets and resolution frameworks. In many places, this includes a complete Islamic deposit insurance system in which premiums are invested in sharia-compliant assets, or "lenders-of-last-resorts" that adhere to sharia.
• Regulators who "do not always have the capacity (or willingness) to ensure Shari'a compliance."

Default

In the three years during and after the financial crisis 2007-2008 - 2008, 2009, 2010 - there are at least 21 substantial sukuk defaults, and some major failures like Dubai World saved by a $ 10 billion loan from Abu Since 2009, there have been a number of cases where sukuk failed or experienced serious problems. In May 2009, Dar Kuwait Investment failed on $ 100 million sukuk . Saad Group established a committee to restructure $ 650 million of the Golden Belt 1 sukuk . Standard & amp; Poor's cut the rating of the sukuk it "because of unavailability of important information". Other sources (Mushtak Parker) claimed there were "only three or four" sukuk default - sukuk East Cameron in Louisiana (dispute relating to instrument benefit sharing arrangements); Investment of Dar sukuk (related to "cash flow issue of the company and its subsidiaries, although there is a side dispute with investors, Blom Bank related to sharia aspects of the contract"); and "famous" Saad/Al Gosaibi sukuk ("more market failures and internecine disputes between two Saudi partners").

Protection from default originators

At least one of the three major bond rating agencies for the US has shown doubts about the "legitimacy" of asset transfers from sukuk originators in "insolvency insertion events" and attempts by creditors to confiscate assets. "Fitch has not reviewed any transactions to date that will meet these requirements."

Underscoring Fitch's concern was the bankruptcy of East Cameron Partners ECP who issued numerous winning sukuks in 2006 but filed for bankruptcy in October 2008, prompting a legal dispute over creditor rights for $ 167.67 million in asset sukuk. (The final decision of the case is "unclear resolving this issue".) Other major rating agency, S & P, downgraded Dubai Islamic banks and Sharjah Islamic Bank.

According to Ibrahim Warde in 2010,

What is not clear is what happens to the sukuk when they fail - a matter that has not been tested in court. In Malaysia, some sukuk issues have junk status, and two other sukuks have failed: Cameron gas company Easter in the United States and Dar Kuwait Investment. One unresolved question is whether the sukuk holder must stand on the line of the creditor or on the line of the underlying asset owner. "

In reviewing the default cases of sukuk and bankruptcy, Muddassir Siddiqui complained about it

"Through reading the many cases that have so far been brought to justice around the world, I have found that in almost all cases, courts have struggled to reconcile the substance and form of contracts whether sales, leases, constructions or contractual partnerships or financing arrangements between parties? "

According to Rodney Wilson, when sukuk payments are postponed or failed, "the compensation facility is potentially more complex than for conventional records and bonds". In particular, "under the leniency of Shari'ah against the debtor is preferred", which inevitably creates a moral hazard problem.

Discredit Sharia Compliance

There are at least two cases of companies seeking to restructure their debts (ie pay fewer creditors), claiming that their debt is not in accordance with sharia. In the 2009 petition filed Dar Investments, a Kuwaiti company claimed the transaction "took deposits with interest".

In June 2017, an independent gas company (Dana Gas PJSC) announced two sukuknya - totaling $ 700 million - no longer comply with sharia standards, and offered to exchange the sukuk with a new one that would pay "less than half of the current profit rate and no conversion features ". Sukuk is issued in 2013 and matures on October 30, 2017. The fund refuses to make payments to them, alleging that "changes in Islamic finance over the past few years have made bonds unlawful in the UAE". A month earlier, Dana had announced plans to restructure its debt, stating that it needed to "focus on short-and medium-term cash preservation." The sukuk holders, represented by fund managers BlackRock and Deutsche Bank, have been arguing against the Fund in the High Court of London. In October 2017, a court in the emirate of Sharjah in the UAE - where the Fund has filed for protection - postponed the decision on sukuk. This issue has been called "one of the greatest challenges facing the Islamic finance industry of late," but the idea that the case was "a blow to Islamic finance" has also been dismissed as "nonsense".

Criticism and controversy

Sukuk has been criticized for avoiding restrictions on riba, and mimicking conventional bonds.

In February 2008, the AAOIFI board of directors, led by the "modern Islamic financial ancestor" Sheik Muhammad Taqi Usmani, stated that as much as 85 percent of the sukuk sold to date may not be compatible with all Sharia teachings. In a paper entitled "Sukuk and their Contemporary Applications" released in November 2007, Usmani identifies the following three key laying elements that differentiate Sukuk from conventional bonds:

• Sukuk must represent share ownership in commercial or industrial assets or companies that bring in profits or revenues
• Payments to Sukuk holders must be part of a profit (after cost) of an asset or company
• The value paid to the Sukuk holder at maturity must be the current market value of the asset or company and not originally invested by the principal.

Uthman states that by the mechanism of the Sukuk complex has taken the same characteristics as conventional flowering bonds, since they do not return to investors more than a fixed percentage of the principal, based on interest rates, while ensuring the return of the investor principle in maturity. The Ottoman estimates that 85% of all Sukuks in their issuance are inconsistent with Sharia is based on a guarantee of return and/or repurchase obligations of the issuer - a violation of sharia.

After Ottoman criticism, the global sukuk market shrank from US $ 50 billion in 2007 to about $ 14.9 billion in 2008, although how much this is due to its criticism or the Global Financial Crisis is a matter of debate.

The Financial Times has described this as an "ongoing" debate over "form versus substance" in Islamic finance, identifying two types of sukuk - "sukuk-backed assets" and increasingly, less stringent, allegedly "non- compliant "asset-based" sukuk.In the "asset-backed sukuk" there is "the true sale between the originator and the special-purpose vehicle (SPV) that issued the sukuk holder and the sukuk has no recourse to the originator." Asset prices may vary from time to time. In contrast, the "sukuk-based asset" 'does'' gives the other the holder the path to the originator, and is more like a conventional bond.

Other critics include non-orthodox economist Mahmoud El-Gamal, who complained that while sukuk providers (and other Islamic financial instruments) will often portray their "distinguishing feature" as "banning interest," they will then

proceed to report the interest rate paid by Islamic instruments. For example, Reuters on August 13, 2002, coverage of Bahrain's $ 800 million sukuk... follows the characterization of their Islamic financial products as "interest free" with reports that the sukuk will pay "4 percent of annual profit."

He also complained that despite claiming that sukuk - unlike conventional bonds - share the risk of their underlying assets and can increase or decrease in value, in sukuk such as Tabreed sukuk mentioned above, stable payments of "rent" are written into sukuk contracts giving them the risk structure "essentially" equals conventional bonds.

Another observer, Salman Ali, found that many of the sukuk structures were "incompatible with Shariah ". According to Ali, while most sukuks are trying to remain "within Shari'ah limits," they "imitate conventional debt instruments". They often combine more than one contract, "individually possible Shariah -compliant" but when combined "can defeat the purpose of sharia". Furthermore, the return rate of sukuk is often "tied" to Libor (interest rate offered by London bank) or the euro interbank offered rate "rather than to the underlying business" that sukuk is financing. This makes sukuk "very similar to conventional debt instruments that are difficult to distinguish from others". Ali believes this is probably why rating agencies such as Standards & amp; Poors and Moody apply the same methodology to assess sukuk as a conventional debt instrument.

In 2011, Safari conducted various statistical tests and econometrics to examine the argument that securities sukuks are just the same as conventional bonds. However, the results on the yield to maturity ratio of sukuk and conventional bonds show that the securities sukuk is different from conventional bonds. In response to this argument, it is shown that results to maturity reflect the interaction of supply and demand that may be influenced by product packaging and financial market targets rather than just product substances. In 2011 Goldman Sacks abandoned the $ 2 billion sukuk program listed on the Irish Stock Exchange, after some analysts claimed that the sukuk "may violate the Islamic ban on interest payments and monetary speculation" (in 2014 it managed to attract about $ 1.5 billion in orders for five-year sukuk).

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Countries using Sukuk

Bahrain

Bahrain is the main publisher of sukuk.

Brunei

Starting in 2006, the Government of Brunei issued short-term Sukuk Al-Ijarah securities. By 2017 they have spent more than B $ 9.605 billion.

Egypt

On May 8, 2013, Egyptian President Muhammad Morsi approved a law allowing the government to issue sukuk, but in May 2013 the relevant regulations have not been set. In 2016 the Egyptian government says it will use "innovative financial tools for the implementation of government projects", such as Sukuk.

Gambia

In 2007, Gambia replaced Sudan as one of the ten countries that issued sukuk. It has one of the lowest sukuk publishing, with $ 12.6 million in 2008.

Indonesia

According to islamicfinance.com, by the end of 2013, stocks in the Indonesian sukuk market were US $ 12.3 billion, with growth coming from the government sector.

Iran

Although the first use of Islamic financial instruments in Iran returned to 1994 with the issuance of Musharakah sukuk by the City of Tehran to finance the Navab project, the enactment of Iranian securities market law, and new instruments and legal development of financial institutions conducted respectively in 2005 and 2010 to pave the way for instrument tools to develop the country's financial system. The first Sukuk Ijarah was published in Iran Capital Market in January 2011 to finance the Mahan Air company with a value of 291,500 million Rials.

Malaysia

More than half of sukuk issued worldwide use Malaysian Ringgit currency. (US dollar-denominated bonds are the second.) Malaysia is one of the few countries that requires sukuk and other debentures to be rated. RAM Rating Bhd. CEO Foo Su Yin said the total issuance of sukuk corporate bonds in 2012 was RM 71.7 billion while conventional bonds amounted to RM48.3 billion. As in 2011, Malaysia is the highest global sukuk publisher by issuing 69 percent of the world's total emissions.

Kazakhstan

In June 2012, Kazakhstan completed its debut sukuk to be issued by the Kazakhstan Development Bank (DBK) in the Malaysian market. DBK, 100% owned by the Kazakh government, is working with HSBC and Royal Bank of Scotland (RBS) to manage the issuance of ringgit-denominations that are effectively quasi-sovereign bids. This issuance will be listed on the Kazakhstan Stock Exchange, which has developed an infrastructure to list Islamic financial products such as Ijara and Musharaka Sukuk and investment funds.

Kuwait

Pakistan

Pakistan issued a $ 1 billion sukuk to fund the trade deficit with a 5% yield.

Qatar

Qatari authorities and government-linked companies are seeking funding for infrastructure projects by issuing Sukuk. In 2011 Qatar released 11 percent of global Sukuk.

Saudi Arabia

Saudi Aramco, Saudi Arabia's national oil and natural gas company, issued its first Sukuk on April 6, 2017. Raising about 11.25bn Riyal ($ 3bn), the move was asked in response to low oil prices.

Later in the same month, the Saudi government raised US $ 9 billion in sukuk. The half is a five-year sukuk with a spread spread of 100 basis points and the other half has ten ten years with a spread of 140 basis points. In September 2017, the government sold a further 7 billion riyal ($ 1.9 billion) of domestic sukuk and another 4.77 billion riyals ($ 1.27 billion) sold in December. This combined five-year sukuk with a price of 2.75%, seven years at 3.25%, and 10 years at 3.45%.

Singapore

Singapore is the first non-Muslim majority country to issue a State Sukuk in 2009. Called MAS Sukuk domestically, it is issued through a wholly-owned subsidiary of Singapore Monetary Authority - Singapore Sukuk Pte Ltd Singapore MAS Sukuk is treated equally to a conventional Singapore Government Securities ( "SGS") in such aspects as compliance with liquidity requirements.

Since then there has been some Sukuk publishing in Singapore by local and foreign issuers. Singapore City Development Limited issued its first Sukuk Ijara in 2009, and Khazanah Shd Bhd issued a Sukuk of SGD1.5 billion in 2010 to finance the acquisition of parkway ownership. In 2013, there are 2 new Sukuk Programs prepared for Singapore-registered companies - Swiber Holdings & amp; Vallianz Holdings, with the former issuing 5-year sukuk worth SGD150 million in August 2013.

Somalia

The Somali Stock Exchange (SSE) is the national Somali exchange. In August 2012, SSE signed a Memorandum of Understanding to assist in technical development. The agreement includes identifying the appropriate skills and support. The sukuk bonds which are in accordance with sharia and halal equity are also dreamed as part of the deal as the newborn stock market develops.

Turkish

Turkey issued its inaugural sukuk in October 2012. The issuance of October 2012 is a double issue, with one being in US Dollars (issued on October 10, 2012 for $ 1.5 billion), and one on Turkish Lira (issued on October 2, 2012 for 1, 62LRY). According to data from Sukuk.com, the US dollar issuance is oversubscribed and initially planned at $ 1 billion, but as strong demand from the Middle East rises to $ 1.5 billion.

Turkey returned to the Sukuk market in October 2013 with the issuance of $ 1.25 billion.

United Arab Emirates

In January 2015, NASDAQ Dubai has listed 18 sukuk totaling $ 24 billion. The latest of these is Fly Dubai. The UAE has also attracted Western investments in the form of GE, which sells 5-year sukuk, $ 500 million in 2009, and investment banker Goldman Sachs, who became the first conventional US bank to issue sukuk in 2014.

United Kingdom

On June 25, 2014, HM Treasury became the first country outside the Islamic world to issue sakk. This £ 200 million problem is 11.5 times oversubscribed and priced at the same level as British Gilts (UK government bonds) at 2.036% pa. The Sakk is related to UK government property rental income.

Hong Kong

Source of the article : Wikipedia