A Review on Historical Development of Sukuk
This paper reviews the historical development of sukuk with reference to issues aroused in the development process. Some opinions argues that the current practices of sukuk are contrary to the Shariah law. While another views that it complies with the law. Thus, the understanding of the concepts...
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| Main Authors: | , , , |
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| Format: | Conference or Workshop Item |
| Language: | en |
| Published: |
2016
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| Subjects: | |
| Online Access: | http://eprints.unisza.edu.my/681/1/FH03-FKI-17-09285.pdf http://eprints.unisza.edu.my/681/ |
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| Summary: | This paper reviews the historical development of sukuk with reference to issues aroused in the
development process. Some opinions argues that the current practices of sukuk are contrary to
the Shariah law. While another views that it complies with the law. Thus, the understanding of
the concepts is crucial to ensure the legality of the instrument based on Shariah Law. This study
employs textual analysis to identify the main characteristics of sukuk as practiced in Malaysia.
Some selected term sheets of sukuk are analyzed. In addition, a semi-structured interview is
conducted on samples of Malaysian scholars and practitioners in order to get their practical
views on these issues. This study found that sukuk is a type of securitization that based on
underlying asset compared to conventional bond that mainly based on loan with interest. The
return of sukuk comes from the underlying assets and not from the interest as offered by the
conventional bond. Finally, Sukuk has been recognized as Shariah compliant instrument in the
Islamic Capital Market worldwide as the best option for the investors who are looking forward to
invest in the Islamic Capital Market. It accommodates the investor's needs to invest in Islamic
capital market either for Muslims or non-Muslims worldwide. |
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