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This study aims to shed light on the challenges and obstacles (organizational, economic, legal and legislative) to the issuance of Islamic Sukuk in Palestine.

The descriptive analytical approach was adopted to collect data through a questionnaire that was distributed to a simple random sample of (500) male and female employees working in those banks.

The study concluded that the issuance of Islamic Sukuk in Palestine suffers from economic, legal and legislative challenges and obstacles. This includes the lack of interest in using it as a suitable financing tool to finance various economic projects, as it requires the presence of investors with high financial solvency in light of the low contribution of Palestinian legislation and laws to facilitate and encourage their issuance. Hence, there are no regulatory challenges or obstacles.

Few studies examine the issuance of Sukuk in the Palestinian environment, despite the attempts of the Palestinian Monetary Authority to develop Islamic financing instruments.

The necessity of subjecting the issuance of Islamic Sukuk in Palestine and all Islamic financing products to a unified body It is also important to work on spreading the Islamic financing culture related to their issuance, given its positive role in developing and providing the necessary funding for various projects.

The study identifies the level of challenges and obstacles facing the issuance of Islamic Sukuk in Palestinian banks by studying the organizational, economic, legal and legislative dimensions. The study attempts to explore this through the respondents’ opinions. It also focuses on emphasizing the role of this performance in economic development and supporting the elements of investment as a desirable financing alternative.

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.

This study aims to investigate beneficial right as a new legal concept and term accepted by the Indonesian legal system. The new concept was ratified to endorse government decision to use ṣukūk (as an Islamic financial instrument) in the financing of state budget deficit. Some legal issues emerged after the ratification such as the necessity to synchronize the beneficial right with other property rights in Indonesia and the disharmony between laws related to sovereign ṣukūk issuance.

The study uses a qualitative method with library study and interviews with relevant legal experts in Indonesia as the data collection techniques.

The findings show that the passage of Sovereign Ṣukūk Law 2008 that ratified beneficial right deemed as a concession point by the government to solve conflicts between legal restriction and employment of state-owned assets as the underlying asset of sovereign ṣukūk. The study deemed the necessity to improve the use of beneficial right in the Indonesian legal system which by the concept is not exercised for the issuance of sovereign ṣukūk only. There is the need to harmonize the administration of this right with other property rights in Indonesia.

The scope of study will be limited to the Indonesian regulation related to the use of beneficial right concept in the issuance of sovereign ṣukūk in Indonesia. The regulation as mentioned will be in the form of statutes, presidential or ministerial regulations, and also opinions of Indonesian legal and sharīʿah scholars regarding the matter.

This study may explore significantly the use of beneficial right for the issuance of sovereign ṣukūk by the Government of Indonesia. Specifically, the study reveals and addresses the issues that are following the ratification of beneficial rights originated from the common law system into the Indonesian civil law system.

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.

This study aims to examine the fiscal policy drivers of sovereign sukuk market development in selected Organization of Islamic Cooperation (OIC) countries. Specifically, the research aims to analyze the effects of fiscal deficit, public debt and government expenditure on sovereign sukuk market development, while controlling for macroeconomic and financial factors.

The sample consists of eight OIC member countries that play active role in the global sukuk market which include Saudi Arabia, United Arab Emirates, Malaysia, Indonesia, Qatar, Pakistan, Turkey and Sudan. In addition, the study covers a period of 10 years spanning between 2011 and 2020. Similarly, the study uses three models, namely, random effect, generalized least square and system generalized method of moments panel models. To check for the robustness of the results, the study replaces current values of fiscal policy variables with one-year lagged values.

The findings establish that fiscal policy variables significantly influence the development of sovereign sukuk markets. Specifically, public debt is a significant fiscal variable that promotes sovereign sukuk market development, while fiscal deficit has a negative effect on the development of sovereign sukuk market. However, the findings suggest that government expenditure does not influence sovereign sukuk issuance in the OIC member countries.

The study is significant to both investors and regulators in the sukuk market because it attempts to spotlight the importance of sound fiscal climate in developing sovereign sukuk market. Public debt is a facilitator, whereas fiscal deficit appears to be a constraint. Therefore, policymakers should determine the optimal mix of public debt and fiscal deficit in designing policies that promote sukuk market development.

The novelty of the study is its focus on the role of fiscal policy variables in facilitating sovereign sukuk market development. The study systematically establishes the link between fiscal policy and sovereign sukuk market in the OIC countries. Previous empirical studies focus extensively on the effects of macroeconomic, financial and institutional factors on sukuk market development.

This study aims to examine the determinants of Sukuk credit ratings of issuing firms in Malaysia, and the rating changes from lower to higher rating and vice versa.

A total of 328 Sukuk issuances and 1,110 Sukuk rating announcements from 2009 to 2014 were analysed using generalized ordered logit regressions approach. Firm financial characteristics, corporate governance attributes, macroeconomic factors and Sukuk structures (debt or equity based) were among the important determinants used to explain the different Sukuk credit ratings.

The results indicate a positive association of Sukuk credit rating with issuing firm’s financial information, governance attributes and the Sukuk structure whilst the macroeconomic factors did not explain the changes in the Sukuk credit rating. Specifically, firm size, profitability and leverage characteristics had significant positive effect on Sukuk credit rating for listed firms whilst only firm’s profitability had a positive effect on Sukuk credit rating by unlisted firms. With regard to governance, the board structure which includes board size, board independence and CEO/Chairman non-duality is associated with positive Sukuk credit rating for listed firms. Only financial report audited by big four auditors is associated with positive Sukuk credit rating for unlisted firms. Equity-based Sukuk are associated with positive Sukuk credit rating for listed firms while for unlisted firms only the Ijarah Sukuk had a positive Sukuk credit rating.

Data on credit rating is scarce and had to be hand-collected from published reports. Furthermore, issues on the lack of standardisation of Islamic contracts in different geographical areas could constrain on the comparability of findings on determinants of ratings in different jurisdictions.

The findings provide some guide to the rating agencies to objectively assess the issuer’s creditworthiness that could mitigate default risk. Mitigating the default risk will boost investors’ confidence and credibility of credit rating agencies.

This study examines the determinants of Sukuk credit rating of issuing firms in Malaysia, which include not only the listed firms but also the unlisted firms.

This study aims to analyze the causes and implications of legal uncertainty in the issuance of conventional municipal bonds in Indonesia and to draw lessons from Vietnam’s approach in providing better legal certainty.

This study adopts a normative legal method with a legislative approach and applies a comparative approach. Data sources involve primary and secondary legal materials from both Indonesia and Vietnam.

The legal uncertainty is caused by a lack of coherence and consistency in legislation. Based on Vietnam’s experience, Indonesia can gain valuable insights related to providing strong legal certainty for parties involved in issuing or investing through conventional municipal bonds.

This study focuses on the comparative legal analysis of conventional municipal bonds in Indonesia with Vietnam.

This research provides recommendations for the refinement of legislation regarding conventional municipal bonds to the government.

This study is related to legal certainty as a strategy to attract investment through municipal bonds and to ensure the municipal bond issuance process is transparent and efficient.

This study provides a comparative perspective on the issuance of municipal bonds in Indonesia, with a special focus on Vietnam, emphasizing the urgency of harmonization in legal regulation and the sustainability of legal certainty.

Despite its potential as an emerging market for Islamic financial services, Uzbekistan has lagged in legislative support. This study aims to evaluate the feasibility of introducing an Islamic capital market (ICM) in Uzbekistan, preceding a broader industry establishment.

The authors begin by assessing Islamic finance literacy and the potential demand for ICMs in Uzbekistan. The authors then scrutinize Uzbekistan’s capital market legislation and its readiness. This analysis uses primary data, including surveys and interviews, and secondary data from literature and financial legislation.

This study highlights a significant demand for ICMs, despite low Islamic finance awareness in Uzbekistan. Presently, Uzbekistan’s capital market development is lacking, with regulations not yet suitable for ICMs. As a result, legal and operational enhancements are needed.

The authors provide essential policy recommendations for authorities and practitioners to facilitate the effective launch of ICMs and enhance Uzbekistan’s capital market stature.

To the best of the authors’ knowledge, this is the first study offering an in-depth analysis of the potential and feasibility of ICMs in Uzbekistan.

Green sukuk (GS) is an emerging financial tool that has gained momentum in recent years owing to increased attention being given to Islamic finance, socially responsible investing (SRI) and sustainability agendas. Yet, GS studies are fragmented, dispersed and lack comprehensive reviews. As a response to this gap in academia, this paper aims to synthesize the knowledge on GS into thematic clusters, providing a more comprehensive understanding of the subject and offering guidelines for future research.

This study implemented a systematic literature review approach to analyse studies on GS that were published prior to and including June 2023. The PRISMA 2020 protocol was used in the sample selection process. A total of 62 peer-reviewed journal articles from six databases were identified and categorized into various themes.

The results suggest that previous research has predominantly focused on the areas of GS advantages, drivers, market development and potential sectors, along with challenges and recommendations to improve the market. However, it was found that some other aspects, including GS pricing, performance and purchasing intention, require further research attention. The analysis also indicated that the use of theories in the GS context was limited, with only five theories employed in just four out of the 62 articles examined. Moreover, this paper’s findings revealed that the studies employing quantitative and empirical analysis methods were limited to four articles. Geographically, most of the studies were conducted in Indonesia and Malaysia, while other countries with high-potential markets (e.g. GCC) had limited GS practices and studies.

The results of this study have several practical implications. For investors, a review of GS will provide greater insight into the understanding of the GS market, helping them make better investment decisions. For policymakers, this paper empowers them with the knowledge to make informed decisions regarding GS markets by highlighting key recommendations identified in the literature. Finally, the proposed guidelines can be used in future research.

While Green Bonds have received significant attention, there is a dearth of research on GS and those that exist are fragmented. A systematic literature review is necessary to identify knowledge gaps for future research.

This study aims to identify the factors that influence the willingness of Bangladeshi retail investors to invest in ṣukūk.

The authors surveyed Bangladeshi retail investors using a structured questionnaire to understand their perspectives on potential investment in ṣukūk. The authors considered the behavioral aspects of retail investors and the desired ṣukūk features to analyze the demand side. Factors and regression analyses were performed to identify the persuading factors.

The results indicate that investor awareness is a fundamental factor in potential investments in ṣukūk. Investors perceive the security represented by government and third-party guarantees as a persuasive feature of ṣukūk. The tradability and tenor of ṣukūk also affect the investment intention. Sharīʿah consciousness of the investors also plays a significant role in their investment decisions.

One limitation of this study is that it incorporates potential individual investors only, and precludes institutional investors. In the future, there is scope for research to explore the demand factors impacting institutional investors of ṣukūk in Bangladesh.

The authors expect that the study will aid policymakers and ṣukūk issuers in crafting strategies to cater to the needs of Bangladeshi retail investors.

This study is the earliest research conducted in Bangladesh to determine the factors impacting the willingness of individual investors to make their potential investments in ṣukūk. To the best of the authors' knowledge, no study has analyzed the desired ṣukūk features from the perspective of Bangladeshi retail investors.