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Introduction to Sukuk
Sukuk (the plural of sakk) represent one of the most vibrant and significant components in Islamic finance. Sukuk refers to certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts endorsed by the SAC, but shall not include any agreement for a financing/investment where the financier/investor and customer/investee are signatories to the agreement and where the financing/investment of money is in the ordinary course of business of the financier/investor, and any promissory note issued under the terms of such an agreement.
Globally, the sukuk market has experienced tremendous growthThough sukuk market issuances declined in 2008 as a result of global market turmoil, long-term prospects for the sukuk market remain strong.  Global sukuk outstanding rose to more than USD231.4 billion at the end-2012.
 A total of USD131.2billion (2012) worth of sukuk papers were recorded from the primary market, representing a yo-y increase of 54.2%. (KFH Research)

Malaysia pioneered the development of the global sukuk market with the launch of the first sovereign five-year global sukuk worth US$600 million in 2002. Since then our sukuk market has experienced unprecedented growth with Malaysia firmly established as one of the largest issuers of sukuk over the years.
The development of the sukuk market in Malaysia is supported by a comprehensive infrastructure including the reporting, trading and settlement system which has resulted in an active primary sukuk market.
Without a doubt, Malaysia offers one of the most viable options for participation in this fast growing asset class. Coupled with Malaysia's more than 30 years of experience in Islamic finance and its overall comprehensive domestic sector, Malaysia offers several attractive value propositions for local and foreign sukuk issuers and investors.
In Malaysia, the issuance of sukuk is regulated by the Securities Commission Malaysia, through the framework provided under the Guidelines on  Sukuk. The structure of sukuk must be confirmed and approved by a Shariah Adviser who is appointed by the issuer. A Shariah Adviser can be an independent Shariah Adviser approved by the SC or a Shariah Committee attached to a financial institution that operates Islamic banking activities approved by Bank Negara Malaysia.
Sukuk are structured based on the specific contract of exchange of Shariah-compliant assets. Such contracts can be made through the sale and purchase of an asset based on deferred payment, leasing of specific assets or participation in joint-venture businesses. Hence, the issuance of sukuk is not an exchange of paper for money with the imposition of an interest but rather an exchange of Shariah-compliant asset for some financial consideration applying various Shariah principles, such as bai' bithaman ajil (BBA), murabahah, ijarah, mudharabah and musharakah that allow investors to earn profits from the transactions.