StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Islamic Finance: Malaysian Global sukuk - Essay Example

Cite this document
Summary
Sukuks are certificates of “equal value representing undivided shares in ownership of tangible assets, usufructs and services or (in the ownership…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95% of users find it useful
Islamic Finance: Malaysian Global sukuk
Read Text Preview

Extract of sample "Islamic Finance: Malaysian Global sukuk"

Download file to see previous pages

It differs from the traditional marketable securities in a way that it has a source of stable income and has a tangible asset base. Traditionally, sukuks are not supposed to be tradable because Islam prohibit to make money in the form of an interest (riba) in accordance with principle of the Shariah teachings quoted as; It is therefore prohibited for one to make money from money which is in the form of interest which is the debt instrument that banks use to make to money in the form of a loan from being practice in Islamic countries.

Strictly speaking, trading of debts and conventional loans are prohibited in countries that practice sukuk. Thus, sukuk differs from a traditional debt instrument or conventional bond which is a guarantee to settle a loan in a way that sukuk is supposed to constitute an ownership of a debt. Also, sukuk should have an asset base that has a stable income either in the form of a lease or ownership (Zin et al., 2011). In a Malaysian context, the treatment sukuk takes a more liberal way. It is because sukuk as a bond can assume the form of a debt certificate and its mode of finance has the characteristic “similar to those of a conventional bond, but is structured so as to be compliant with Shari’a law and can be sold to Islamic investors who are prohibited by Shari’a law from investing in securities” (Kettel nd).

Sukuk is still not similar to a bond because bond’s represent a debt of the issuer whereby the recipient collects interest on the debt. Rather, sukuk in Malaysia is used to service the need for “working capital or to re-finance existing debt, normally to be used in the transportation sector, especially in the shipping and aircraft sectors, real estate, construction and also in the petrochemical projects” (Majid et al 2.1). In this scheme, the payment is deferred whereby the amount of the price is agreed beforehand, including the time and method of its payment without requiring to state the

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Islamic Finance: Malaysian Global sukuk Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Islamic Finance: Malaysian Global sukuk Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/miscellaneous/1616701-islamic-finance-malaysian-global-sukuk
(Islamic Finance: Malaysian Global Sukuk Essay Example | Topics and Well Written Essays - 1000 Words)
Islamic Finance: Malaysian Global Sukuk Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/miscellaneous/1616701-islamic-finance-malaysian-global-sukuk.
“Islamic Finance: Malaysian Global Sukuk Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/miscellaneous/1616701-islamic-finance-malaysian-global-sukuk.
  • Cited: 0 times

CHECK THESE SAMPLES OF Islamic Finance: Malaysian Global sukuk

Trends in the Global Emergence of Islamic Banking and Finance Practices

Global reach – First and foremost, the major trend in islamic finance is geographical.... Adoption of a Shari'ah based legal framework – A major development in the adoption of islamic finance and a certain sign of its widespread adoption is the move towards the establishment of a dispute resolution system that pursues a distinctively Islamic legal framework.... For instance, in October 2003 the Bahrain Monetary Agency announced the move of Citi Islamic Bank and parent Citigroup to arrange a $250 million sukuk (Islamic bond) issue for investors outside the Gulf....
4 Pages (1000 words) Essay

Civil Society in Malaysia and Thailand

In Thailand, the implementation of the new constitution in 1997 paved way for more robust participation in the Thailand politics by the civil society The salient nature of the civil society is exemplified when the malaysian Prime Minister Najib Razak announced that the malaysian government was finally going to repeal the draconian Internal Security Act (ISA), sometime in 2013, since the civil society in Malaysia had been agitating for this....
5 Pages (1250 words) Essay

Why The Lahad Datu Crisis In Sabah (Malaysia) Happened

Sabah has been a quota of the malaysian alliance ever since the early1960s1.... The clash and subsequent military operations reportedly resulted into the killing of more than fifty people, inclusive of eight associates of the malaysian police.... The malaysian ministry of welfare was fast to name the armed Filipinos as bombers.... Remarkably, the prime minister of Malaysia has yet to let go the notion that malaysian opposition politicians have collaborated with the Sulu sultan in order to undermine the nation and bring down the presiding alliance ahead of the year's universal polls....
4 Pages (1000 words) Research Paper

Promoting education of Islamic Finance In Australia

islamic finance is the new representation of financial institutions and it is said to be the answer in looking for a better and fairer way of managing money and in underpinning the real financing activities.... The rules in islamic finance are under Muslim's law (Shariah) which… islamic finance is a rapidly growing industry in the financial system considering that 20% of the world's population is Muslim and Islam being the third largest religion....
2 Pages (500 words) Research Paper

An empirical analysis of islamic online banking in Malaysia(with empirical evidences)

Proceedings of the Fourth Harvard University Forum on islamic finance, islamic finance, The Task Ahead.... Islamic banking is a financial activity that is in accordance with Sharia or Islamic law, which has become an active part of the global financial industry and has been expanding in both size and stature over time (Amin et al.... Malaysia is one of the countries where… This percentage makes Malaysia the fourth largest country in percentage of Islamic banking facilities after Iran, which controls about 55%, republic of Saudi Arabia 13% MALAYSIA ISLAMIC BANKING PRODUCTS BY COLLEGE PRESENTED TO Malaysia Islamic Banking Products Islamic banking is a financial activity that is in accordance with Sharia or Islamic law, which has become an active part of the global financial industry and has been expanding in both size and stature over time (Amin et al....
2 Pages (500 words) Essay

Malaysian Banks

tmlHome - global - Schroders.... om/global/homeImportant Notice.... The concept of ‘service fee' is highly demised because it is a vague term that all malaysian banks utilized.... HSBC malaysian bank also is one of these banks that is not shariah approved because of this issue.... k/useful-info-tools/islamic-finance/sharia-compliance/malaysian Banks.... om/Finance/malaysian-banks.... Hence, the concept of shariah finance is extremely hard because each country wants some revenue when it comes to financial securities....
2 Pages (500 words) Term Paper

Failure of Islamic Banking

The same problem was observed in the islamic banks; though the PLS system aimed at increasing the wealth of the investors but it failed to fulfil the expectation of the shareholders (Dar and Presley, 2000).... However, its success is questioned because, with time many issues were observed....
8 Pages (2000 words) Essay

Development of Sukuk in the Middle East

The structure of sukuk mainly complies with the Islamic religious law which is known as Sharia.... sukuk is considered as financial certificate of Arab.... sukuk is a… The issuer of sukuk enters into a contractual agreement or promises to buy back the bonds at a par value on future date.... The concept and the ure of sukuk has been introduced and developed because the structure of payment of bond on the basis of western method is not allowed or permissible in Arabian countries....
12 Pages (3000 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us