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

Islamic Finance: Malaysian Global sukuk - Essay Example

Comments (0) 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 paperFile format: .doc, available for editing
GRAB THE BEST PAPER97% of users find it useful
Islamic Finance: Malaysian Global sukuk
Read TextPreview

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 pagesRead 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
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Islamic Finance: Malaysian Global sukuk

Use of ijarah sukuk by Islamic banks

...financial Instruments Ijarah Sukuk is a type of sukuk based on leased assets, involves securities of the same value of every issue, and stands for long lasting physical assets. These assets are attached to an ijarah contract that is based on Shari’a. On that note, there are several reasons why Ijarah Sukuk is considered a contentious financial instrument. For example, Ijarah Sukuk permits corporate customers access to other methods of Islamic refinancing. In addition it grants Islamic organizations a way of handling their liquidity. In contrast, lack of global standards on the acceptable commodities facilitates the...
12 Pages(3000 words)Essay

Islamic finance

...payment transaction. In this mode of finance, an individual expecting the delivery of goods at a future date enters into a salam transaction whereby he takes full payment of that good in spot value from a bank, and in return gives the entitlement of that good to the bank. The condition of Salam is that the price must be paid in full today, and it must be on spot. The idea of a Salam transaction is to provide immediate cash flow ease to individuals such as farmers who pledge it against their crops etc. 7. Istisna Lastly, Istisna is a form of Islamic transaction in which a good which has yet to be manufactured is transacted. This is evident in the case of large manufacturing orders/goods which are only...
6 Pages(1500 words)PowerPoint Presentation

Islamic finance

...Islamic Finance Islamic finance and banking was launched as a significant practice in the financial field almost 30 years ago and has grown from a marginal industry to raise hope in a situation that was getting desperate. It may be defined as a finance system that conforms to Islamic law, also known as Sharia, although the definition does not imply that is it limited to Muslims or Islamic countries (Rammal & Zurbruegg 86). Islamic finance is guided by ethical concepts prescribed by Sharia in relation to money and capital and the association between profit and risk as well as the social...
8 Pages(2000 words)Essay

Islamic Finance

...., 1993. The Global marketplace: capitalism and its future. London: HarperCollins. RESNICK, S. A. & WOLFF, R. D., 2002. Class theory and history: capitalism and communism in the USSR. New York, London: s.n. THOMAS, A. S., 2006. Interest in Islamic economics understanding riba. London: Routledge. WARDE, I., 2010. Islamic finance in the global economy. Edinburgh: Edinburgh University Press. YATIM, M. N. M. & NASIR, A. H. M., 2007. The principles and practice of Islamic banking & finance. Selangor, Malaysia: Prentice Hall/Pearson Malaysia Sdn Bhd.... for transaction needs. Islamic banks derive these rules from the Holy Quran, the Sunnah and from Islamic scholars. In order to observe Islamic...
6 Pages(1500 words)Essay

Islamic Finance

... in the Global Economy Edinburgh University Pres pp 20-24 www.islamic-world.net/economics/economic_banking_01.htm retrieved on 20th February 2008. www.meezanbank.com/knowledgecenter/knowledge-islamic-section retrieved on 20th February 2008. Appendix: Fig:1. Islamic Mode of Financing Fig: 2.Sukuk Fig 3. Bonds: Fig 4: Islamic Fiancing growth Fig 5: Structure of Islamic Banking Fig6 : Assets Islamic Banking... . It is important to note that in its application to business and finance, the shariah recognizes change and as policy matter encourages flexibility in business and commercial practices, provided those practices are consistent with certain broad...
32 Pages(8000 words)Coursework

Business/Finance (islamic Finance)

...to Islamic Financial Services Board Website. 2007. 25 April 2007 . Mohammed El Qorchi, (2005), 'Islamic Finance Gears Up', Finance and Development, Volume 42, Number 4, http://www.imf.org/external/pubs/ft/fandd/2005/12/qorchi.htm Patrick Fletcher, (2005), Building Retail Interest, Structured Products, http://db.riskwaters.com/global/risk/foreign/islamic_finance/pdfs/Is_risk_14-16.pdf Staff Reporter Khaleej times, Business times (2005), 'Challenges facing Islamic Financial Institutions', khaleej times,...
4 Pages(1000 words)Research Proposal

Islamic finance

...based principle. At that time, the conventional financial system was considered as more important due to the role of the financial systems flowed in the Western countries from the global economic perspective. The Islamic financing systems existed in small geographic regions and their activities were limited. It is indicated by the researchers that the first trends of Islamic banking were noticed in the way the Islamic institutions conducted the transactions and payment procedures related to trade in the medieval times. But the first noticeable Islamic finance process was established in Egypt during the 1960s. The...
10 Pages(2500 words)Research Paper

Islamic Finance

...Islamic finance Islamic finance is undergoing a new transition (DiVanna & Sreih, 2009). This is because the world is advancing in technology, which requires the Islamic Finance to upgrade their systems in accordance with new inventories thus thriving not only in their respective regions but also globally. Though some complies with this transition, some still disagrees and curses this revolution citing that it does not comply with Islamic Sharia law tracing their faith and beliefs from Quran and Prophet Mohammed (DiVanna & Sreih, 2009). These sharia laws require all Islam followers to abide by these laws. Hence, the present state of this Islamic finance is trying to upgrade and cope up with the economic, banking and finance crisis... which is...
2 Pages(500 words)Case Study

Islamic finance

...Islamic Finance Based upon the analysis of the chapter, it has been revealed that the Islamic financial system has changed the entire operational procedures of banking practices in the Islam communities. Moreover, the system has made the financial institutions to avert banking crisis with the assistance of equity based banking practices, which is quite different from the traditional banking system. It has nurtured the banking system through the development of new financial instruments wherein the cash flow in banks is obtained from transaction and investment deposits along with the lending operations. In this regard, the Islamic financial system with the...
12 Pages(3000 words)Essay

Islamic Finance

...with the use of financial ratios: A data envelopment analysis approach. Management Accounting Research, 15, pp. 201- 224. Hobson, S., 2006. Project financing – risks underlying sukuk structures. Islamic Finance News. 3 (44), p. 15. Ika, S. and Abdullah, N., 2011. A comparative study of financial performance of Islamic banks and conventional banks in Indonesia. International Journal of Business and Social Sciences, 2(15), pp. 199-207. Mills, P.S. and Presley, J.R., 1999. Islamic finance: Theory and practice. Basingstoke: Palgrave Macmillan. Saddy, F., 2009. Risky Business. Islamic Banking &...
8 Pages(2000 words)Essay
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.

Let us find you another Essay on topic Islamic Finance: Malaysian Global sukuk for FREE!

Contact Us