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We empirically investigate the determinants of sukuk issuance type in Indonesia to issue either ijarah sukuk or mudharabah sukuk. We include sukuk characteristics, sharia-related factors, and firm characteristics, provide empirical evidence on the determinants of sukuk issuance type by incorporating sukuk-specific factors, firm-specific factors, and sharia compliance variables, and address the role of Sharia Supervisory Board, as the sharia representative of firm compliance for sharia products, in the issuer’s choice of sukuk type. By studying 88 sukuk issuance in Indonesia from 2009 to 2017, we find that firm profitability and the sharia compliance level have a significant effect on the probability of issuing mudharabah sukuk. Some other factors’ characteristics including sukuk yield, firm age, and inflation rate are also found to have a significant effect.

This study aims to examine the effect of several factors on Muslims' intentions to invest in the Hajj fund Sukuk, Jordan. The study's hypothesis and model were derived from previous studies.

The present study was undertaken based on a self-administered questionnaire of 356 Jordanians who are Muslims and non-investors in Hajj Fund Sukuk. The sample was selected using a purposive sampling method. The data were analyzed using Smart-PLS version 4.

The results indicated that social influence, knowledge, religion and return on investment significantly affect the purchase intention of Jordanian Muslims to invest in Hajj Fund Sukuk.

There are some limitations to this study. First, the study was done in Jordan; thus, additional research might be conducted in other parts of the Islamic world to learn more about the perception of investing in Islamic Sukuk, particularly Hajj Sukuk. Second, while the present study used a quantitative research technique to achieve its purpose, it would be advantageous if the researchers used more qualitative techniques, such as interviews or focus groups, in the future to explore additional factors that may impact Muslims' intent to invest in Hajj Fund Sukuk.

The findings of the current study could help practitioners in the Islamic sukuk industry by identifying the key factors that encourage Muslims to invest in Hajj sukuk. They may use the results of this study in the formulation of marketing policies and the development of marketing strategies to persuade more investors to invest their money in these sukuk.

To the best of the author’s knowledge, this is the first study carried out to better understand the main factors that may influence Muslims to invest in Hajj Sukuk in the Jordanian context. Hence, this study contributes to increasing the body of knowledge in the area of Islamic marketing in general and in the field of Islamic sukuk investment specifically.

This study aims to investigate the extent of Shariah compliance in wakalah sukuk and Shariah non-compliant risk disclosure in the sukuk documents and to analyse the risk management techniques associated with the disclosed risks.

This study uses qualitative document analysis as both data collection and analysis methods. The document analysis acts as a data collection method for 23 wakalah sukuk documents selected from 32 issuances of wakalah sukuk from 2017 to 2021. These sukuk documents were selected based on their availability from relevant websites. Document analysis, both content analysis and thematic analysis, were used to analyse the data. Codes were grounded from that data through keywords search of Shariah noncompliant risk and its risk management. Besides these, interviews were also conducted with four active industry players, i.e. two legal advisors of wakalah sukuk, a wakalah sukuk trustee and a sukuk institutional issuer. These interview data were analysed based on categorical themes, on the aspects of the extent of Shariah compliance in sukuk, and the participant’s views on the risk management techniques associated with the risks or used in the sukuk documents.

Overall, the findings reveal three types of Shariah non-compliant risks disclosed in the sukuk documents and seven risk management techniques associated with them. However, the disclosure and the risk management techniques can be considered minimal in contrast to the extent of Shariah compliance in a sukuk, i.e. Shariah compliance at the pre-issuance stage, ongoing stage and post-issuance stage. On top of these, it was also found from the interviews that not all risk management techniques are workable to manage Shariah non-compliant risk in sukuk. As a result, these findings suggest rigorous reviews of the existing Shariah non-compliance risk (SNCR) disclosures and risk management techniques by the relevant parties.

Sukuk documents used in the study are limited to corporate wakalah sukuk issued in Malaysia. Out of 32 issuances from 2015 to 2021, only 23 documents are available in relevant website. Thus, Shariah non-compliant risk disclosure and its risk management techniques analysed in this study are only limited in those documents.

The findings of this study suggest rigorous reviews on the existing Shariah non-compliance disclosures and risk management techniques. Other than these, future research in relation to uncommon risk management clauses, i.e. assurance, Shariah waiver and transfer of risk, are needed.

The insights presented in the analysis are of importance to sukuk issuers and the sukuk due diligence working group in enhancing the sukuk Shariah compliance and Shariah non-compliant risks disclosure and towards sukuk investors, in capturing and assessing Shariah non-compliant risks in a sukuk and to assist them to make informed investment decisions. More importantly, this study has found few areas of future study in relation to SNCR disclosures and SNCR risk management techniques.

The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of 2010–2021.

This study refers to the International Country Risk Guide (ICRG) in determining the financial risk factors to be studied in addition to the Malaysia financial stress index (FSI) to capture changes in financial risk level. The authors use the nonlinear autoregressive distributed lag (NARDL) model to tackle the nonlinear relationships between identified financial risk variables and Sukuk market development.

The results suggest the existence of a long-run relationship between foreign debt service stability, international liquidity stability (ILS), exchange rate stability (ERS) and financial stress level with the Sukuk market development in Malaysia. Indeed, higher ILS and ERS will boost Sukuk market size, whereas higher foreign debt services and financial stress are negatively related to Sukuk market development. Findings also indicate that the long-run positive and negative impacts of identified financial risk components on Sukuk market development are statistically different. Taking into account the role of the Sukuk market in facilitating Malaysia’s economic growth, the country should aim to keep the foreign debt-to-GDP ratio at a sustainable level.

This study points to three possible directions for future research. The first is the differential impact of financial risk components on Sukuk issuance for different Sukuk structures. As more data becomes available in the future, this area could be further explored by conducting the above analysis for different combinations of Sukuk structures and currency denominations. In addition, future researchers could also consider exploring the variability of financial risk impacts through comparative studies of the leading Sukuk-issuing countries to account for differences in regulatory frameworks and supporting infrastructure.

This study provides valuable practical and policy implications for strengthening the growth of the Sukuk market. While benefiting from the diversification benefits of funding sources to finance private or government projects and developments, Malaysia should remain vigilant to global economic conditions, foreign exchange markets and financial stress levels, as all of these factors may significantly influence investor sentiment and the rate of return offered by Sukuk issuance.

The use of the NARDL approach, which investigates the long-run effects of financial risk factors on Sukuk market development in Malaysia, makes this study a valuable addition to the literature, as there has been little research into the asymmetric effects of those variables on Sukuk market development using samples from emerging Asian markets.

I study the determinants of conventional leverage in a sample of publicly listed corporations based in Saudi Arabia, United Arab Emirates, and Qatar, for a period spanning from 2005 up to end of 2014, and investigate whether those determinants can also explain the utilization of Sukuk by the same corporations in their capital structures. Evidence related to the determinants of conventional leverage is consistent with results from prior studies conducted on corporations based in developed and developing countries. Firm’s size, profitability, tangibility, age, and tendency to pay dividends are significant determinants of conventional leverage. However, not all those factors significantly explain the utilization of Sukuk as a financing vehicle. The size of the firm remains to be the most significant factor, in addition to the conformance of those corporations with respect to Shari’a principles measured by their utilization of other Islamic investments and financing instruments. Overall, I conclude that models used to predict conventional leverage are not capable of fully explaining the determinants of Sukuk issuances.

COVID-19 pandemic was a health crisis that plunged the world into economic turmoil due to its resultant national lockdowns across economies which brought business and market activities to a standstill. In order to adapt to ensuing restrictions owing to the pandemic, forge ahead in a new way of living, work and interactions with one another (new normal), digitizing business and market operations is considered a necessary option. Sukuk is an essential Islamic capital market product whose operations involve multiple parties/intermediaries alongside some technical financial, administrative and legal/shariah processes. On this note, this chapter aims to study and examine the need for digitizing and automating sukuk operations and related activities to pave way for innovation, development and better continuity of sukuk market. In conducting the study, a review of literature approach is employed where relevant works on sukuk and fintech were examined. Using content analysis, the chapter explored digitization of sukuk in the Islamic capital market via fintech and blockchain and associated benefits, including peculiar challenges therein. An interview was also conducted to better understand the Wethaq case study. The chapter reveals that digitizing sukuk issuance adds value to sukuk and remedies certain inadequacies associated with sukuk transactions; can increase transparency of underlying sukuk assets and cash flows and can reduce costs due to lesser number of intermediaries. Digitization is the future of sukuk issuance and will promote sukuk well through the COVID-19 crisis and beyond.

Sukuk restructuring primarily aims at offering a debtor more latitude, in form and time, to settle his obligations. To meet Shari’ah requirements of transferring assets to Sukuk holders in asset-based Sukuk, the originator usually transfers the beneficial ownership to the issuer special purpose vehicles (SPV). However, in asset-backed Sukuk, the originator sells the underlying asset to an SPV and Sukuk holders do not have recourse to the originator in the event of defaults. Among some key unresolved Shari’ah issues in this regard is whether a change of contract necessitates entering a new contract. Other related issues that conflict with the tenets of Shari’ah are: (1) Sukuk structuring on tangible assets and debts; (2) receiving the full title by the Sukuk holders to the underlying assets in the event of default in case of securities that are publicized as asset backed; (3) Sukuk’s similarity with interest bearing conventional bonds: (a) capital guarantee by the originator or third party, (b) the originators’ promise to repurchase Sukuk at face value upon their redemption, and (c) providing internal and external credit enhancement. The Shari’ah-compliance of the above-mentioned clauses and structures of Sukuk remain debated among the Shari’ah scholars. Based on some specific cases, this study examines the Shari’ah viewpoint on sukuk restructuring and potential solutions to these unresolved Shari’ah issues in light of the past and recent declaration of some Sukuk defaults as non-Shari’ah complaints. Undoubtedly, resolution of these and other unresolved issues pertaining to Sukuk defaults can help strengthen the confidence of investors in Islamic capital market structures.

Sukuk are popular means for governments to raise money through sovereign issues, and for corporations to obtain finance through corporate sukuk offerings. The purpose of this study is to critically examine the issues revolving around various aspects of sukuk such as regulation, performance and future challenges from different Asian market jurisdictions.

Using various sukuk structures and other literatures, this chapter critically investigates some general legal and regulatory requirements for sukuk issuance, its required infrastructure in various jurisdictions in addition to some other relevant important issues to generate cash flows and raise finance through Islamic capital market (ICM) operations without violating the tenets of Sharī’ah in sukuk structures which ultimately helps the economic growth of the Asian region.

The study finds that in many Asian countries, a separate and specialised regulatory framework, as demanded by sukuk, is lacking and this instrument is treated under the same regulations as of conventional capital markets and their instruments. Some of the regulations may be appropriate for ICM and sukuk, however, most of these regulations need proper modification in order to treat sukuk with clear understanding.

Being part of a niche and new area of Islamic finance in the global financial market a plethora of confusion exists regarding various aspects of sukuk including regulation, performance and future challenges particularly in Asian jurisdiction where sukuk are largely in operation. Findings from this study can be used as a reference to understand the need of the proper modification of conventional regulations, the performance of sukuk in better ways, and meeting other relevant challenges.

Although the demands for having specialised regulatory framework of sukuk, or at least amendments in the current framework for conventional bonds is gaining momentum worldwide in order to accommodate sukuk in the capital markets according to their peculiar nature, it has not caught much attention of researchers and practitioners involved with Islamic finance. Therefore, this study is expected to add value to regulation, standardisation and performance of sukuk in the Asian market, and it deals with the obstacles in the growth of sukuk, which were not extensively covered earlier by the researchers and the Islamic finance industry practitioners.

In literature, a vast number of researches have tried to analyse the interaction between different financing methods and corporate governance. Some believe that good corporate governance companies are more successful in equity financing whereas others believe in positive relationship between corporate governance and debt finance. In this chapter, the authors analyse the interaction between sukuk financing and corporate governance. The authors first tried to differentiate between the financer and company's point of view in the financing decisions of different corporate governance quality companies, and then showed that, theoretically, there should be a positive relationship between murabahah sukuk and ijarah sukuk issuance and the corporate governance quality of companies in both types of views. The corporate governance characteristics of sukuk issuing companies in Iran are also analysed. The results from model estimation confirmed theoretical conclusion and corporate governance variables had positive and significant effects on the Sukuk issuance among Iranian Sukuk issuer companies.