Sukuk its simplest form, Sukuk is a certificate

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Sukuk its simplest form, Sukuk is a certificate

Sukuk is normally
known as an Islamic or Sharia compliant ‘Bond’ in
actual fact
which it is an asset-backed trust certificate. In its simplest form, Sukuk is a certificate evidencing ownership of an
asset. The Sukuk structures rely on the creation of a Special Purpose Vehicle (SPV) who issue Sukuk
certificates to the investors. The return profit that Sukuk could base on Mudaraba, Musharaka, Murabaha,
Salam, Istisna, Ijara and etc.  This is used to provide alternative
funding for financing projects through asset securitization. A recent reform
that allows Islamic Finance to participate in yet another area of conventional
finance.

In Islamic, fixed income and called
as interest (riba) bearing bonds are not permissible. It is principles prohibit the charging, or paying of
interest. Financial assets that comply
with the Islamic law can be trading in secondary markets. Based upon existing Islamic Financial transactions,
sukuk offer Islamic financial institutions and investors another way to raise
capital through profit sharing without a prime rate, but achieving the same result as
conventional finance. Benefits of sukuk is among financing large enterprises, an ideal means
for investors seeking to deploy streams of capital, manage liquidity for banks
and Islamic financial institutions and equitable distribution of wealth.

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On the other hand, there have the examples of sukuk
that issuance by Japanese companies such as Nomura Holdings and BTMU are
motivated to enter this market is to diversify their funding sources by region
and currency, raise funds aimed at providing sharia-compliant financial
services to the local market, improve their image and name recognition in the
Islamic world, gain access to investors in Southeast Asia and the Middle East,
assume the role of an arranger for future Japanese sukuk issuances, and
strengthen their relationships with governments seeking to develop Islamic
financial markets and with major market players.

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