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This study aims to analyze the effect of investment ownership of Sovereign Sukuk (SBSN) and Financing Distribution on profitability which is proxied by Net Income Margin (NIM) at Bank Syariah Mandiri in the 2013-2020 periode. This research is associative because it aims to determine the influence and relations between two variables. The data used in this study are secondary data obtained from the quarterly financial reports of Bank Syariah Mandiri in the periode 2013-2020, data obtained from the Otoritas Jasa Keuangan (OJK) and other data related to the subject and object of research. This study uses multiple linear regression analysis method and the analytical tool used is SPSS version 25. The results show that simultaneously the variables of Sovereign Sukuk and Financing do not have a significant effect on Net Income Margin. Partially the SBSN variable does not have a significant effect on the NIM variable, as well as the Financing variable does not have a significant effect on the NIM variable.

Purpose The paper aims to resolve the ongoing issue of asset pricing in indexed based investments, primarily in Sukuks. It is to be done by modeling the returns of S&P MENA (Middle East and North Africa) Sukuk index (SPS), S&P MENA bonds indices (SPM) and Dow Jones MENA (DJM) equity index using system equations and to find out cointegration among them. Design/methodology/approach In this study, daily data of stated regional market indices, from the month July 2013 to June 2017, are analyzed using the cointegration model and Generalized Method of Moments (GMM) estimation. Findings Findings revealed through cointegration test that indices are found to be not integrated in the long run; however, in short run, DJM is having one way relation with other two indices, and SPM and SPS are having unidirectional relation. The results of the GMM model show that SPS is significant in influencing SPM and vice-versa, and rest other variables are insignificant in influencing each other systems equations. Originality/value There is ample work available on various Islamic indices, but there is no study found on the MENA (Middle East and North Africa) Equity, MENA Bond and MENA Sukuk indices together.

This article explained how the existence of corporate sharia bonds (Sukuk) during the pandemic. Sukuk was one of the instruments owned by Islamic financial institutions, namely the Islamic capital market. The existence of the coronavirus had existed for one year. By using the library research method, and using qualitative descriptive, namely the method by describing and interpreting the existence of Islamic bonds (Sukuk) in the pandemic period qualitatively, namely the description and description in words based on library data, journal articles, OJK and related data. The data collection method used the documentation method then the data was processed so that it completes this article. The results showed that the record was the outstanding value of Sukuk from 2016 to January 2021 had increased from 11.88 trillion to 30.25 trillion. Meanwhile, the number of outstanding Sukuk had experienced a good development from 2016-January 2021, namely from 53 to 161. And the accumulated value of Sukuk issuance had also increased, from 2016-January 2021 from 20.43 trillion to 55.15 trillion. Meanwhile, the accumulated number of Sukuk issuances also increased from 102 to 274.

From the early 1920s to the late 20th century, there were at least 25 financial crises globally. In 2018, the Global Islamic Finance Report reported that Indonesia has tremendous potential to develop Islamic finance. Some of the Islamic financial products that can be developed in Indonesia are bonds and sukuk. Bonds are a product of the capital market. In its development, bonds have undergone relatively rapid innovation, which provides room for issuing Islamic bonds known as sukuk. This paper discusses the difference between sukuk and bonds. This paper aims to look at the differences between sukuk and bonds and the opportunities for issuance, application, and development of sukuk in Indonesia. This research is qualitative research that is literature. As for obtaining comprehensive results, this study uses two approaches consisting of a socio-historical approach and content analysis. The analysis results show that sukuk are in principle the same as bonds, with the main differences, among others, in the use of the concept of return and profit-sharing as a substitute for interest. Keywords: Sukuk; Bond; Sharia Bonds; Capital market; Indonesia

The Effect of Sukuk Issuance on the Financial Performance of Islamic Banking in Indonesia by using the Return On Asset (ROA) ratio to measure the profit of a company from the return on assets and return on equity as measured by Return On Equity (ROE). This study uses a linear regression analysis method where the dependent variables are ROA and ROE, and the independent variable is the issuance of sukuk. The results show that the issuance of sukuk does not have a significant effect on the Return On Assets (ROA) of Islamic commercial banks registered with the OJK. but the issuance of sukuk has a significant effect on the company's Return On Equity (ROE). Islamic general banking that is registered with the Financial Services Authority”.

The use of sukuk in social development is an under-researched area, especially in the context of Sub-Saharan Africa. Although the Kenyan government has issued the world’s first mobile bond and the Indonesian government has used mobile platforms as a distribution channels for the issuances of retail sukuk, little is known about mobile sukuk and its potential from the perspective Islamic social finance. This paper aims to explore the opportunities and challenges of mobile sukuk for social development, namely perpetual waqf mobile sukuk, where the concept of waqf is combined with qard. It is anticipated that the proposed type of sukuk has the potential to be used as an Islamic social finance instrument.

The purpose of this study is to analyze macroeconomic indicators that affect the growth volume of corporate sukuk emissions in Indonesia. Macroeconomic indicators used in this study are inflation, exchange rates and ithe BI rate. So the research object examined by the author is Inflation (X1), Kurs (X2), and BI Rate (X3) as independent variables and Corporate Sukuk Emissions in Indonesia (Y) as the dependent variable. The method used in this study is a quantitative research method with a descriptive approach. The author selects companies that issue corporate sukuk in Indonesia as a research sample. The data used in this study are secondary data on capital market statistics for the 2014-2018 period downloaded Otoritas Jasa Keuangan (OJK) website. The research model used is multiple linear regression analysis using windows-based data processing applications. The results of this study are that inflation has a negative and significant effect on the Growth Volume of Corporate Sukuk Emissions in Indonesia, Exchange Rate has a positive and significant effect on the Growth Volume of Corporate Sukuk Emissions in Indonesia, and the BI Rate does not significantly influence the Growth Volume of Corporate Sukuk Emissions in Indonesia.

The growth of any economy in the world will happen on the back of the needed infrastructural facilities. And to build the needed infrastructures for national development requires a lot of money and time. There have been incessant concerns of the citizenry on the present level of infrastructural neglect and decay in Nigeria. The infrastructural decay in Nigeria ranks very high when compared to the national resources to the availability and quality of the needed infrastructure. The availability of needed infrastructures will enhance ingenuity, novelty, employment, self-confidence, wealth creation, and social security. However, it is wretched to note that the dire infrastructure in Nigeria is in a bad state thereby creating an evolving crisis. The inability of the government of Nigeria to maintain and endure her perilous infrastructure such as; road rails and pipelines network, the micro small and medium enterprises will require developed and scalable transportation infrastructure ( Land, Air, and Water), Electricity energy ( power for industrial and domestic use), Educational infrastructure ( Schools, Research and instructional materials), Health infrastructure ( Hospital, trained personnel, and Equipment), Security infrastructure ( Police, Military and Para-military). This study aims to explicate the potential of Sukuk as an alternative and sustainable financial vehicle for financing infrastructural development in Nigeria. The study is library-based and analytical and evaluation approaches are used to explore related library-based data on the causes and effects of infrastructural development in Nigeria. The study investigates and describes how the Nigerian government can utilize the potentials of Sukuk investment for infrastructural development across the nation.

Public debt is a prime source of government revenue to finance budget deficit. Developing countries have been relying on public debt to cater the needs of fiscal expenditure. With the emergence of Islamic banking and finance across the globe, Muslim governments have introduced Sukuk (Islamic Bonds) to generate funds by the governments to meet their expenditure. The present study aims to discuss the possibilities of introducing Sukuk as an alternative way of financing public expenditure in Pakistan by replacing other conventional modes of financing in the future. The study will discuss the viable options available to the Government of Pakistan to offer Sukuk instead of bonds as a means of raising funds from abroad.

PurposeThe global sukuk market has seen widespread innovations in the last couple of decades, which helped sukuk develop into one of the most acceptable Islamic instruments for raising finance. According to the State of the Global Islamic Economy Report (2018–19), United Arab Emirates (UAE) is ranked second among Islamic economies and Nasdaq Dubai is credited to be the leading international center for sukuk listings (Thomson Reuters, 2018). However, there has been limited research studies on this financing option within the region. To the best of the authors’ knowledge, this study is the first to focus on the role of signaling theory driving the financing choice for listed entities in the UAE. The paper aims to make a significant contribution in light of the recent expansion of sukuk issuances and fills the lacuna in research carried out in the UAE bond market.Design/methodology/approachThis study empirically tested the hypotheses on a data set that covered a sample of 1,354 bond issuances over the period 2008–2019. The authors used logistic regression to distinguish between the issuance of sukuk versus conventional bond. Sukuk structuration leads to information asymmetry that prompts firms to send signals to the capital market. Information asymmetry has been studied in terms of issue-specific (maturity and issue size) and issuer-specific (firm size, growth, profitability, leverage) variables. Two control variables were included to capture the years under study and the macroeconomic effects of economic slowdown.FindingsThe banking sector accounted for 93% of bond issuances but contributed only 63% of the bond market in the UAE in terms of issue size. The data evidenced that non-banking sukuk issuances expanded over the years, with participation from sectors like real estate, oil and gas, logistics and utilities and contributed 50% of issuances in the UAE sukuk market. Typically, firms with smaller asset sizes and higher financing requirements were found to favour sukuk. The banking sector revealed irrelevance of information asymmetry, as Islamic Banks were mandated to issue sukuk. Non-financial firms with high profits and high debts were prompted to prefer conventional bonds, in line with the adverse selection mechanism.Originality/valueAlthough UAE’s sukuk market has existed for more than a decade, scant research has been carried out. Few studies exist for the GCC region that either concentrated on stock market reactions to issuances of Islamic versus conventional bonds or studied capital market characteristics of non-financial entities alone. This is the first study to focus on signaling theory and information asymmetry playing a role in the capital structure of all listed firms (banking and non-banking) issuing bonds in the UAE.

When the world economy suffered a new financial economic crisis, it uncovered to the world that there were major failures within the Industrial financial system and it was caused by a number of issues including the practice of interest and the terrible effect it has on the financial crisis events. Issues that will be discussed in this paper are Riba, Gambling, Uncertainty, Derivatives, Saucerization, Sell of debt, Creation of Money, and the Private “Personal” interests. However, the paper will focus on the Islamic financial system and the financial instruments which are based and designed in compliance with Shariah Rules and Regulations, whether if practicing Islamic banking would cause such a crisis to accrue. The Sukuk, of the Islamic mortgage-Backed securities (MBS), and Islamic future contract will be discussed in order to prove why using the Islamic Financial system is better to assure that this kind of global crisis doesn’t come to pass again.

Implikasi dari perkembangan dunia perbankan adalah munculnya berbagai jenis dan bentuk lembaga keuangan, salah satunya Perbankan Syariah. Konsep sistem yang diterapkan oleh Perbankan Syariah adalah bentuk bagi hasil antara nasabah dengan bank itu sendiri. Sistem ini tidak memperhitungkan sistem atau bisa juga disebut bank tanpa bunga. Penelitian ini bertujuan untuk menganalisis bagaimana pengaruh Suku Bunga Deposito Per kapita, Inflasi dan Produk Domestik Bruto (PDB) terhadap permintaan sukuk terhadap produk Sukuk Ritel di Indonesia. Data yang digunakan dalam penelitian ini adalah data time series dengan menggunakan metode analisis regresi berganda. Hasil penelitian menunjukkan bahwa nilai koefisien regresi sebesar -0,331 (negatif) dan nilai signifikan (0,000) lebih kecil dari taraf signifikansi (0,05) yang menunjukkan bahwa nisbah bagi hasil berpengaruh negatif. Inflasi menghasilkan nilai t sebesar 4,972 dan memiliki tingkat signifikan 0,000 dimana nilai tersebut signifikan dengan signifikansi 0,05 dan lebih kecil dari 0,05. Dari hasil uji t dapat disimpulkan bahwa inflasi berpengaruh positif signifikan terhadap prediksi permintaan sukuk ritel. PDB per kapita menghasilkan nilai t sebesar 5,250 dan memiliki tingkat permintaan sukuk ritel yang signifikan sebesar 0,01 jika dibandingkan dengan derajat kesalahan yang telah ditentukan sebesar 0,05. Variabel ini signifikan. Dari hasil uji t dapat disimpulkan bahwa PDB per kapita berpengaruh positif signifikan. PDB per kapita berpengaruh positif dan signifikan dalam memprediksi permintaan Sukuk ritel. Hal ini menunjukkan bahwa pada periode 2012-2019 PDB perkapita positif yang meningkat dari tahun ke tahun menjadi indikator laju pertumbuhan ekonomi. Kata Kunci: Pengaruh Perkapita, Inflasi Deposito dan Produk Domestik Bruto, Permintaan Sukuk Di Indonesia

Purpose This paper aims to examine the effect do Sukuk Spur Infrastructure Development of Sukuk market expansion on infrastructure development for a sample of 15 emerging countries over the period 1997–2018. The paper also compares the role of Sukuk in infrastructure development to that of the size of the banking system, bond market development and stock market development. Design/methodology/approach A novel index of infrastructure development is constructed via principal component analysis. This index is regressed on Sukuk market development and other macroeconomic and institutional variables. To tackle the problems of heteroscedasticity and the existence of serial correlation in the residuals, the panel model is estimated using the generalized least squares (GLS) procedure with random effects and robust standard errors. Findings The evidence shows that a well-developed Sukuk market contributes to the expansion of the country’s infrastructure, whereas a larger banking system and a better capitalized stock market do not have any significant effect on infrastructure development. Surprisingly, well-developed bond markets jeopardize infrastructure expansion, thereby pointing to a potential crowding-out effect between Sukuk and bonds in financing infrastructure investments. Additionally, per capita GDP and education are positively related to infrastructure development, whereas inflation has a negative effect on the country’s proliferation of infrastructure. Originality/value This study uses a novel infrastructure index via principal component analysis and shows that Sukuk markets fill an important gap in the financing of large-scale and long-term projects. This result is novel and has not been documented in previous research.

For almost a decade the world has been struck by two global financial crises – the crisis of 2008–2009 and the ongoing socio-economic crisis caused by the COVID–19 pandemic. Although these crises continue to have a serious impact on the global economy, they differ in terms of root causes and timing of action. The crisis of 2020 affected almost all spheres of society, not only financial organizations suffered, but, first of all, small and medium–sized entrepreneurs whose business had to be temporarily suspended or closed completely.The programs of anti–crisis measures taken by the governments of different countries practically do not differ from each other in their conceptual component, declaring financial injections into the banking sector or the social sector as priority measures to support the population as priority measures, taking into account the capabilities of the Digital Industry 4.0 mechanisms to a small extent, including the case of providing the necessary financial assistance to all economic entities.The work of Islamic financial institutions is directly related to real business, therefore, in the case when small and medium–sized enterprises do not have financial and other opportunities, including in the case of restrictive measures introduced by governments, to interact with their financial institutions, the financial regulators of the country together with the management of banks should develop a number of plans for overcoming the current situations, taking into account the goals of Sharia (Maqasid al–Shari’ah).The list of standard anti�crisis products for the financial market is confined to social Sukuk, Qard al–Hasan, Zakat, Waqf, however, taking into account the fact that it is crisis situations that provide a good opportunity for the development of new directions (products, services), the market of Islamic financial instruments needs to switch to FinTech solutions, especially since the forecasts of the countries of the Arab region on this direction show positive dynamics and tremendous potential.

The economic growth of a country is strongly influenced by the availability of infrastructure that will support various economic activities. The need for the availability of funds and infrastructure development is a dilemma given the limited sources of state budget revenue. The issuance of Sovereign Sukuk (SBSN) is one of the government’s breakthrough to overcome this problem and is expected to be a solution option that can be used for infrastructure financing. This study aims to identify the development and contribution of Sovereign Sukuk (SBSN) for infrastructure development in Indonesia, include during the Covid-19 pandemic. From the results of data analysis using the library research method, its known that Sovereign Sukuk have a role as a source of APBN financing. The issuance of Sovereign Sukuk with various series of sukuk has contributed greatly to the develpoment of the various infrastructure projects in Indonesia. The total value of issuance and outstanding of Sovereign Sukuk also tends to increase every year which shows that Sovereign Sukuk is a financial instrument that is in demand by investors, both institutional investors and retail/individual investors because apart from being able to nvest, investors can also contribute to the country’s development.

Since the 1970s, the GCC (Gulf Cooperation Council which is composed of Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman) members succeeded to have economic development through their natural resource endowment. Nevertheless, starting from the 2000s, they have been struggling with local and international economic and political shocks. It became indispensable to diversify their economies to protect their economies from unexpected external shocks. Islamic financial instruments, particularly sukuk offers alternative solutions to these countries. In this vein, this study focuses on sukuk and its possible role in the macroeconomic performance and sustainable economic growth of the GCC. As a relatively new Islamic financial instrument, sukuk was first issued in 2001-2002 for drawing funds from international funds. Since then, sukuk became one of the most crucial Islamic financial instrument in passing 20 years. The aim of this study is to pinpoint the benefits of sukuk practices for the the GCC economies and analyze how sukuk can contribute to the economic growth in the member countries. The anaysis will be based on the case study. It is concluded that sukuk market has a great potential to contribute to the macroeconomic performance of the GCC. Development of sukuk markets in the GCC will not only promote the financial inclusion but also induce economic growth., 1970’lerle birlikte özellikle muhafazakar müslümanların faizin haram olması ilkesinden hareketle alternatif bir finansman modeli konusunda artan taleplerini karşılamak üzere İslam ekonomisi ilgi görmeye başlamıştır. Öte yandan, sömüge sonrası dönemde, bağımsızlığını ilan eden Müslüman ülkeler ve kalkınma çabası içine giren diğer Müslüman topluluklar, yüksek düzeyde artan fon ihtiyaçlarını karşılamak üzere kaynak arayışı içine girmişlerdir. Petrolün küresel ekonomide önemli bir hammadde olması ve hızla artan fiyatları ile birlikte, 1970’lerden itibaren Suudi Arabistan, BAE, Katar, Bahreyn, Kuveyt ve Umman’dan oluşan Körfez İşbirliği Ülkeleri (GCC) ekonomik kalkınmalarını yer altı zenginliklerinin çıkartılması ve ihracına dayalı olarak gerçekleştirmişlerdir. Ancak bu ülkeler, 2000’li yıllarla birlikte yerel ve dış kaynaklı ekonomik ve siyasi şoklarla sarsılmışlardır. Gelirleri neredeyse tamamen doğal gaz ihracatına bağlı olan bu ülkelerin dış kaynaklı şoklara karşı ekonomilerini koruyabilmek için sektör çeşitlenmesine gitmeleri kaçınılmaz olmuştur. Islami finans ve İslami finansal enstrümanlar bu çerçevede giderek daha fazla dikkat çekmektedir. 2001-2002 döneminde ilk defa ihraç edilen sukuk, geçen 20 yıllık süre içinde küresel ölçekte en önemli İslami finansal araçlardan birisi haline gelmiştir. Bu çalışmada, sukukun GCC ülkelerindeki yeri yanında makroekonomik performans ve ekonomik büyümeye katkıları vaka analizi çerçevesinde incelenecektir. Çalışmada GCC ülkelerinde sukuk piyasasının önemli bir yeri olduğu ve bu ülkelerin makroekonomik performanslarına önemli bir fon kaynağı olarak katkı sağlayabileceği sonucuna ulaşılmıştır. Bölgede sukuk piyasasının gelişmesi sadece finansal piyasaların gelmişmesini sağlamakla kalmayacak aynı zamanda kamu ve özel sektöre sağlayacağı fonlarla ekonomik büyümeye katkı sağlayacaktır.

In the period between 2010 and the end of 2018, sharia products, especially sukuk in the Indonesian capital market, have shown quite good development. Total funds under management of sharia mutual funds, or better known as the Net Asset Value (NAV), are recorded at Rp 34.5 trillion. This figure is up by 21.8% compared to 2017. The NAV reflects 6.82% of the total conventional and sharia mutual fund NAV. While the number of Islamic mutual funds that have been circulating in the public, there were 224 mutual funds. This figure increased by 23.1% compared to 2017. The number also reflects 10.7% of the total conventional and sharia mutual funds that have been circulating in public (OJK data sources for 2017 and 2018). In that period, the issuance of sukuk was conducted 104 times by 22 issuers and / or public companies with a total sukuk issuance value of Rp 22 trillion or equivalent to 10.5% of the total bond issuance value. The still low total sukuk issuance value compared to the total bond issuance value shows that there are other factors that influence Issuers / PP's interest in issuing sukuk in addition to regulatory factors related to Islamic capital markets which have had a positive influence on the development of Islamic capital markets, especially sukuk

This research was conducted to determine the effect of taxes, Sukuk, grants, inflation, foreign debt, total financing, and the network of Islamic bank offices on Indonesia's economic growth. Research data for each variable is monthly from 2009-2018. Data analysis variables use Error Correction Model (ECM) Test and Autoregressive Conditional Heteroscedasticity (ARCH) Test with Eviews ver.10. The results showed that in the short and long term, variables taxes, Sukuk, inflation, foreign debt, total financing, and office networks of Islamic banks) affected the Indonesian economic growth. At the same time, grants have no significant effect on economic growth. For variable predictions in the next year (2019), only economic growth, grants, inflation, foreign debt, and network of Islamic bank offices can be predicted. Meanwhile, taxes, Sukuk, and total financing cannot be identified in 2019 because the variables are not significant in the ARCH analysis, so it cannot be diagnosed about future values. This result implies that the government and the community must continue to work together to manage state revenues used to fund productive projects to stimulate economic growth.Abstrak: Penelitian ini dilakukan untuk mengetahui pengaruh pajak, sukuk negara, hibah, inflasi, utang luar negeri, jumlah pembiayaan dan jaringan kantor bank syariah terhadap pertumbuhan ekonomi Indonesia. Data penelitian setiap variabel berupa bulanan dari tahun 2009-2018. Uji variabel penelitian menggunakan Uji Error Correction Model (ECM) dan Uji ARCH menggunakan Eviews ver.10. Hasil penelitian menunjukkan bahwa dalam jangka pendek maupun jangka panjang, variabel pajak, sukuk negara, inflasi, utang luar negeri, jumlah pembiayaan dan jaringan kantor bank syariah berpengaruh signifikan terhadap pertumbuhan ekonomi Indonesia. Sedangkan variabel hibah tidak berpengaruh secara signifikan terhadap pertumbuhan ekonomi. Untuk prediksi variabel di tahun berikutnya (tahun 2019), hanya variabel pertumbuhan ekonomi, hibah, inflasi, utang luar negeri dan jumlah jaringan kantor bank syariah yang dapat diprediksi, sedangkan pajak, sukuk negara, dan jumlah pembiayaan tidak dapat diketahui nilai perkembangannya di tahun 2019 karena variabel tersebut tidak signifikan pada analisis ARCH. Sehingga tidak dapat di diagnosa dalam bentuk ARCH untuk dilakukan forecast data agar diketahui tentang nilai di masa yang akan datang. Implikasi dari temuan ini adalah diperlukan upaya yang berkesinambungan dari pemerintah dan masyarakat dalam mengelola penerimaan negara yang dimanfaatkan untuk mendanai proyek yang produktif sehingga dapat mempercepat pertumbuhan ekonomi.

Sukuk Rating is a standard that reflects the ability of Sukuk issuers and their willingness to pay principal payments according to schedule. This study aims to determine the effect of Total Assets and Total Assets Turnover on Sukuk Ratings with Return on Assets as Intervening Variables. The population of this study is all corporate Sukuk that circulated in Indonesia from 2016 to 2018. The sampling technique used was purposive sampling techniques, with a sample of 33 corporate Sukuk in Indonesia. This research uses the Partial Leats Square (PLS) approach. The results of this study prove that Total Assets have a significant negative effect on Return on Assets. Meanwhile, Total Assets Turnover has a significant positive effect on Return on Assets. Total Assets and Return on Assets partially have a significant positive effect on Sukuk rating. Meanwhile, Total Assets Turnover has no significant negative effect on Sukuk rating. The Return on Assets variable is considered capable of being an intervening variable for the effect of Total Assets and Total Assets Turnover on Sukuk ratings. Although Return on Assets shows an inconsistent mediation effect, the Return on Assets variable also shows a perfect mediating effect for the effect of Total Assets Turnover on Sukuk rating by changing the insignificant effect into a significant effect

Infrastructure development with Sukuk is currently developing rapidly. Sukuk are bonds based on Islamic principles. Sukuk have lower refund rates compared to interest-based bonds. This study aims to explain the role of Sukuk in infrastructure development in Indonesia. This research uses qualitative methods that are analyzed descriptively. With secondary data derived from the literature review in the form of the results of previous studies, documents from valid institutions or institutions, news, and other supporting sources. The results show that Sukuk is an important financial instrument applied in infrastructure development and has a positive contribution to infrastructure development. Since it was published until February 13, 2020, the accumulation of SBSN issuance results has reached Rp. 1,253.4 T. The results of the issuance of the Sukuk were used by the government to finance various infrastructure projects in Indonesia. So the Government can maximize the potential of Sukuk as an alternative to infrastructure financing and start reducing dependence on foreign debt in infrastructure financing

This research aims to show the current status of Islamic finance, especially with the expansion of the Islamic finance sector in the recent years, define Islamic financial innovation, with reference to Sukuk as leading model in the field of Islamic finance, as statistics show that the Islamic Sukuk has become the fastest growing segment of the Islamic financing market now. The study concluded that Sukuk is one of the most successful Islamic financial products; it became a contemporary instrument accepted by Muslims and non-Muslim.

Purpose- The aim of this study is to examine the relationship between countries' Sukuk market development and economic growth. Panel VAR analysis was applied to investigate whether there is a realtionship between these two factors.Methodology- In the analysis of the research, quarterly data of 2014Q1-2019Q2 period is used. Turkey, Kuwait, Malaysia, Pakistan, Saudi Arabian, Sudan, United Arab and Indonesia countries are included in the analysis. In the study, Dumitrescu Hurlin panel causality test was applied as a method. Sukuk and economic growth rates of the countries are used as a variable.Findings- According to the findings obtained as a result of the analysis, a one-way causality relationship is observed from the economic growth to the Sukuk growth rate.Conclusion- When the Sukuk and economic growth results are analyzed, there is no causality relationship from Sukuk growth rate to economic growth. However, a causality relationship has been identified from economic growth to Sukuk growth rate. When the economic growth variance decomposition results are analyzed, in the first period, the change in economic growth is fully explained by itself. When the Sukuk variance decomposition results are analyzed, 99.6% of the change in Sukuk in the first period is announced by itself.Keywords: Economic growth, Sukuk, panel causality, response analysis, Amaç- Bu çalışmanın amacı, ülkelerin Sukuk pazarı gelişimi ile ekonomik büyüme arasındaki ilişkisinin incelenmesidir. Bu iki faktör arasında bir ilişkinin olup olmadığı, Panel VAR analizi ile araştırılmaya çalışılmıştır.Yöntem- Araştırmanın analizinde, 2014Q1-2019Q2 dönemi çeyreklik veriler kullanılmıştır. Çalışmada Türkiye, Kuwait, Malezya, Pakistan, Sadi Arabistan, Sudan, Birleşik Arap Emirliği ve Endonezya ülkeleri analize dahil edilmiştir. Çalışmada, Dumitrescu Hurlin panel nedensellik testi yöntem olarak uygulanmıştır. Ülkelerin Sukuk ve ekonomik büyüme oranları değişken olarak kullanılmıştır.Bulgular- Yapılan analizler sonucunda elde edilen bulgulara göre, ekonomik büyümeden Sukuk büyüme oranına doğru tek yönlü bir nedensellik ilişkisi görülmektedir.Sonuç- Sukuk ve ekonomik büyüme sonuçları incelendiğinde, Sukuk büyüme oranından ekonomik büyümeye doğru nedensellik ilişkisi görülmemiştir. Fakat, ekonomik büyümeden Sukuk büyüme oranına doğru bir nedensellik ilişkisi tespit edilmiştir. Ekonomik büyümenin varyans ayrıştırma sonuçları incelendiğinde, 1. dönemde ekonomik büyümedeki değişimin tamamı kendisi tarafından açıklanmaktadır. Sukuk’un varyans ayrıştırma sonuçları incelendiğinde ise, 1. dönemde Sukuk’daki değişimin %99,6’sı kendisi tarafından açıklanmaktadır.

Islamic finance is one of the most rapidly growing sectors of the global financial system. This paper empirically outlines the pure effect of Islamic finance including Islamic banking and Islamic bonds on economic growth in major Muslim countries. Current study has taken up Islamic banks’ assets and Islamic banks’ financing, total value of sukuk issued and real GDP as measuring proxies. For the analysis, PMG of ARDL framework has been utilized. The outcomes of the study revealed that in the long run, Islamic banks’ assets, Islamic banks’ financing and Islamic bonds are significantly correlated with real GDP in Muslim countries.

With the large expansion of Islamic finance in the recent years, sukuks (Islamic bonds), which are the Shariah-compliant substitute to conventional bonds, are now becoming more prominent. Although ...

A sukuk is an Islamic financial asset structured to offer investors a cash flow equivalent to that of a bond. The difference between them is in their contractual mechanism: a bond constitutes a len...

Sharia-based financial institutions are being developed in Indonesia, especially in Islamic banking and Islamic capital market institutions. The role of financial institutions in economic growth in Indonesia is defined as financial deepening. This study tries to examine the variables of third party-funds, state sukuk and corporate sukuk towards financial deepening. The used research method in this research was the causality method with quantitative approach. The population in this study is Islamic banking and Islamic capital markets, which are registered at the Financial Services Authority (FSA). The sampling technique was saturation sampling. The used method in this research was descriptive-explanatory method with multiple linear regression analysis. The dependent variable in this study is financial deepening. While, the independent variable in this study are the third-party funds, corporate sukuk, and state sukuk. The results show that third-party funds affect financial deepening, state sukuk affects financial deepening, and corporate sukuk does not have any effect on financial deepening.

In its announcement dated 13 June 2017, Dana Gas called for a restructuring of the Sukuk maturing in October worth US$700 million. This demand was based upon the claim that the evolution of Islamic finance and jurisprudence since the original structuring of the mudarabah sukuk had rendered it, in its present form, Shariah non-compliant and hence unlawful and unenforceable under the UAE law. This case analyzes the impact of the events leading up to this decision on the work of financial analysts following such firms and products. In response to the principles laid down by the management for a restructuring deal, the ad hoc committee representing sukuk holders refused to exchange the existing instruments with the new ones. Dana Gas secured a series of injunctions around the globe preventing enforcement by creditors after it ended up in a legal battle with its sukuk holders in courts both in the UK and the UAE. In November 2017, the English court ruled in favour of Dana’s creditors, dismissing the grounds of the company’s claims as unfounded under contractual obligations. Despite this, the legal battle was far from over as a verdict from the UAE court on the validity of the sukuk was still awaited. Although this was not the first sukuk dispute faced by the US$2 trillion Islamic finance industry, it was certainly a distressing and potentially destabilizing development for the international sukuk market.

The present paper analyses the impact of Sukuk issuances on the economic growth of Malaysia over a period of 10 years from 2008 to 2017 on a yearly basis. There are six different types of Sukuk issuances which includes the long-term government/treasury/central bank (LGTC), long-term corporate (LCTE), long-term agency (LAGY), short-term government/treasury/central bank (SGTC), short-term corporate (SCTE) and short-term agency (SAGY) with the presences of the moderating variable which is the exchange rate (ER). The 10 years’ time-series data were analyzed by using the diagnostic test, unit root test and multiple regression analysis. The outcome of the study indicates that the presence of the ER, LCTE, SGTC, SCTE, and SAGY found to have a significant and positive relationship with the economic growth (GDP) of Malaysia. However, LGTC found not to be significant but shows a positive relationship with the GDP in Malaysia, whilst LAGY is found to be significant but shows a negative relationship with the GDP in Malaysia. Therefore, the Sukuk issuances give an impact on the economic growth of Malaysia, whereby with the presences of the moderating variable, the long-term and short-term Sukuk issuances can spur the economic growth of Malaysia.

The budget deficit financing instruments and government projects through sukuk have the potential to increase fiscal sustainability in the long run. Series Retail Government Sukuk which are state securities based on sharia principles issued by the Government as proof of the participation in Islamic Securities Assets, which are sold to individuals (ritail) or Indonesian citizens through a Selling Agent, with a minimum nominal amount determined also has increased nominal issuance since it was first published in 2009. The purpose of this study is to find out the factors that influence the demand for Retail Sukuk SR 05. The variables studied in this study are limited to the price of retail state sukuk, bank deposit interest rates, profit sharing ratio for bank deposits sharia, other bond prices and inflation rates. The form of this research is quantitative descriptive. The data used in this study are secondary data The analytical method used in this study is multiple linear regression analysis. The results showed that the factor that influenced the demand for SR 05 series sukuk was the price of the sukuk itself.

In this paper, we analyse the recent development of green sukuk (often referred to as an Islamic green bond) since its issuance in Malaysia in 2017, and critically evaluate whether it addresses some of the existing contradictions of green finance. Using a financial ecologies approach, we examine Malaysia's configuration of green sukuk as drawing from the existing international green bond regime, partnership with the World Bank, and Malaysia's own experience and expertise in Islamic finance, with the objective of building Kuala Lumpur's competitiveness as a global Islamic financial centre. Through documents analysis and interviews with key market actors in Kuala Lumpur and other financial centres, our findings point to the emergent international adoption of green sukuk. While this achieves Malaysia's state-building objectives, specifically through expanding Malaysia's sukuk market and advancing its status as a frontier of Islamic financial innovations, the potential for improving the current green bond regime has been more doubtful. A key limitation is the incorporation of existing Green Bond Principles, which enables not only green sukuk's international acceptance but also renders it susceptible to greenwashing. By examining the intersection of different ecologies of green and Islamic finance, we reveal the contradictions and limitations of green sukuk in contributing to Malaysian state-building and climate action.

International audience; Sukuk investments require investors and issuers to adhere to subtle moral and ethical standards beyond following mere profit maximization objectives. Investor trust manifested through the level of societal trust could be vital in the global Sukuk investment surge. This study investigates the relationship between the societal trust level and Sukuk activity. It employs a global sample of Sukuk issuances spanning over 2001–2019 and finds that a country’s societal trust level significantly and positively influences the amount of Sukuk issued. Moreover, this positive effect supersedes the negative effects of higher information asymmetry associated with equity-based Sukuk or Sukuk issued by risky firms. Ultimately, trust is both a deterrent and critical for Islamic finance success.

After many years of strong growth performance, Islamic banking industry has become an important source of the global financial system. As one of the pioneer countries, Malaysia has been trying to improve its Islamic financial system since 1980’s by diversifying Islamic financial products. In order to have a sustainable development in Islamic finance in Malaysia, Shariah compliant new Islamic financial instruments are produced. Today, as one of the leader countries in Islamic finance Malaysia has a significant share in the Islamic financial system with its Islamic banks’ assets, sukuk and other Islamic funds. By comparison in terms of Islamic financial assets, Malaysia comes just after Saudi Arabia. The emergence of the Islamic banking system in Malaysia was driven by the demand of depositors for interest free services. To satisfy this need, the first commercial Islamic bank in Malaysia was established in 1983 under the name of Bank Islam Malaysia Berhad. In the banking industry in Malaysia where the dual system has been operated, conventional banks are operating as well as domestic and foreing Islamic banks. As conventional banks also provide Islamic banking services, a strong competitive market has been established in the financial system. With the government’s efforts and legislative changes, Malaysia showed a remarkable performance in passing 40 years. There are numerous institutions and organizations within the financial system such as Islamic banks, conventional banks, Islamic banking branches of foreing conventional banks, offshore banks, windows of conventional banks providing Islamic banking services and intermediary financial companies. With such a sophisticated financial ecosystem, Malaysia has become a model country with its Islamic banking sector exceeding $65 billion. In Malaysia, a wide range of Shariah compliant Islamic contracts such as mudarabah, musharakah, murabaha, salaam and wadiah are used. Besides, sukuk issuance has been started in compliance with Shariah laws in 2002. In recent years, in addition to the sukuk issuance in USD, sukuk issuances in domestic currency ringgit are also recognized in international financial markets. With further innovative implementations on sukuk, an important initiative has been made on protecting environment which is currently in the agenda of the whole world. The new Islamic financial instrument, the green sukuk, supports sustainable environmental friendly infrastructure projects such as renewable energy projects. In this context, green sukuk, just like conventional bonds with fixed income rate, provides investment opportunities in line with the demand of investors who want to make investments on environmental friendly projects. Sukuk issuance directly affects the official reserve level as it promotes capital inflows. Furthermore sukuk issuance has a significant positive impact on capital budget as well as real income growth. By providing tax incentives, Malaysia also welcomes foreign investors those prefer Islamic banking and Islamic financial instruments. With these advantages and innovative products, Malaysia became Asia’s largest corporate bond and sukuk market. In addition to sukuk, much have been done on Islamic insurance, takaful, also. With the new regulations, the development of takaful industry has been supported by the government. Thanks to the tax incentives implemented by the government, foreign compaines from all over the world like UK and Bahrain, opened takaful business branches in Malaysia. However, although Malaysia has managed to become one of the leading countries in Islamic finance with its sound Islamic financial infrastructure, it is a fact that there are some difficulties in the implementation processes. Problems arise from the lack of recongnition of Islamic financial products in sales and marketing, conflicts in establishing a common legal infrastructure, necessity to hold a relatively higher amount of cash comparing with conventional banks are the primary problems of Islamic financial industry in Malaysia. There are many legal regulations and arrangements in Malaysia to overcome these obstacles in front of the Islamic finance sector. Besides, by offering attractive Islamic financial services and instruments in compliance with Shariah laws, the government tries to include the funds outside the financial system due to the religious reasons to the financial system. The deepening and improving soundness of the Islamic financial system brought technologic innovation, internet banking and mobil banking applications which will have a feedback effect on the Islamic financial system performance. In addition to the measures such as minimizing the costs of entering the market and taking precautions to reduce the asymmetric information, developing appropriate financing opportunities for SME’s are the other regulations. It should be noted that there has to be some global regulations along with the local regulations. Establishing global standards on the Islamic financial system, i.e. eliminating the differences between countries in the implementation of the Islamic financial instruments/Islamic banking transactions, minimizing the effects of disagreements because of sectarian differences, empowering oversighting and supervisory institutions and policy making processes, development of financial system with applications such as the acquisition of financial institutions, developing and deepening Islamic interbank markets and providing tax incentives are the most important global protections. In this vein, the aim of this study is to analyze Islamic banking and Islamic financial applications in Malaysia. In the paper, after giving detail information about Islamic banking and Islamic finance practices in Malaysia, some policy implications will be put forth for developing Islamic finance in this country. The paper has the headings of the financial system in the country, the structure and functioning of Islamic banking, Islamic financial instruments, sukuk and takaful practices as well as policy implications for the development of Islamic financial system.

The Sukuk market in Malaysia runs parallel with the conventional bonds market and provides investors with investment options whereby the market trading is open to all. Indeed, Malaysia has proven itself as a center of choice for foreign corporations to issue Sukuk as well as to invest in these areas, as it offers one of the most diverse (in terms of types of securities, tenures, asset classes, structures, issuers and risk profiles), innovative and sophisticated array of investment choices in the global market. Thus, the objectives of this study are to investigate the significant mean different of amount Sukuk issue between Malaysia and across emerging market economies. The secondary data will be utilized to achieve the study objective for almost 10 countries that issue Sukuk from 2000 until 2015. The data then will be analyzed by using ANOVA or post Hoc test comparison as well as Levene’s test. The results prove that Malaysia is a leader in the Sukuk market in terms of largest Sukuk issuer and Sovereign Sukuk and there is a significant mean different between Sukuk issuance by Malaysia and other countries

Sukuk is one of the investment instruments that attract Muslim investors who want to invest in accordance with sharia principles. The demand for sukuk is relatively high every time a sukuk is issued. The study aims to examine the factors influencing the demand of retail sukuk issued by government. Independent variables consist of sukuk price, BI rate, inflation rate and rate of return of Mudharaba investment accounts. Retail sukuk SR-005 is choosen as dependent variable because of the highest average investment per investor during ten years of retail sukuk issuance. The data is taken from February 2013 to February 2016 and analysed using panel data regression. The results indicate that BI rate has negative influence on the demand of retail sukuk SR-005 while sukuk price, inflation rate and rate of return of mudharaba investment accounts do not influence the demand of retail sukuk SR-005. This study is expected to contribute to the scientific development of Islamic finance, especially the study of sukuk.

This study aims to determine how the influence of a sukuk instrument issuance on market reactions listed on the Indonesia Stock Exchange (IDX) during 2015. The research method used in this study is quantitative research. Quantitative research contains a relationship between cause and effect. The type of data used is secondary data, data collection used by the author is to know the relationship between two or more variables. The object to be examined in this study is the total value and rating of the issuance of Islamic bonds (sukuk) companies as independent variables and cumulative abnormal return shares of companies that issue Islamic bonds (sukuk) listed on the Indonesia Stock Exchange in 2015. The results of this study indicate the value of sukuk bond issuance and sukuk bond issuance ratings jointly affect stock returns. The value of issuing sukuk bonds partially affects stock returns and the rating of bond issuance has an effect on return.

The Sharia capital market is currently growing rapidly in the Indonesian economy. One of the instruments, namely sukuk, is being aggressively fulfilling govern­ment needs. Sukuk is widely used as a means of financing the APBN for infrastructure development. In addi­tion, sukuk is also used as a means of investment by the community. Sukuk is the safest investment among investors because it is guaranteed by the government.Abstrak: Pasar modal Syariah saat ini sedang berkembang pesat di perekonomi Indonesia. Salah satu instrumennya yaitu sukuk sedang gencar dalam memenuhi kebutuhan pemerintah. Sukuk banyak dijadikan sebagai sarana pembiayaan APBN untuk pembangunan infra­struktur. Selain itu, sukuk juga dijadikan sebagai sarana investasi oleh masyarakat. Sukuk adalah investasi paling aman dikalangan para investor karena dijamin oleh pemerintah.

Using panel data analysis, this study investigates the relationship among Islamic bonds (Sukuk) and the performance of IB’s of Pakistan for the period of 2008-2017. The study has used two stages approach. At the first stage, the profitability and liquidity of banks have been measured by calculating financial ratios. These ratios were than further used in regression analysis to examine whether a relationship exists between Sukuk and the bank’s profitability and liquidity. Our study found a significant positive relationship among Sukuk and the liquidity of IB’s. While, the results show significant but negative relationship between Sukuk and profitability of IB’s. Based on the findings of the study, we concluded that Sukuk has an important role in enhancing the liquidity of IB’s but it has adverse impact on the profitability of IB’s of Pakistan. Thus, the emergence of Sukuk market may pose threats to the profitability of the IB’s of Pakistan.

The development of the sharia financial industry in Indonesia can be seen from the increase in the number of Sharia Commercial Banks. The rapid development of the sharia financial industry is also followed by the rapid development of sharia financial instruments such as sukuk. Indonesia, through the ministry of finance, has issued 13 Retail State Sukuk types SR001 to SR013, starting in 2012, which has continued to increase in demand from year to year even though it had decreased in SR010 and SR012. Factors influencing the increase in the purchase of State Retail Sukuk are the minimum purchase, interest rates, and ORI coupons obtained by testing the data using statistical tests.