Benefits and Risks Associated With Financing

Running head: BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH
ISSUANCE OF SUKUK, MODULE FROM GCC COUNTRIES
Benefits and Risks Associated With Financing through Issuance of Sukuk, Module from GCC
Countries
Name of the Student
Name of the University
Author’s Note

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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Acknowledgement
I would like to thank my University and the professor for allowing me to contribute as well as
providing opportunity to complete my research despite of all challenges that I have faced. It will
not forget the efforts that are made by the professors and other for guiding me with patience,
guidance and understanding. I would not have completed this research without their guidance
and understanding and you are all special to me.

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Abstract
The research has mainly focused on the benefits and the risks that are associated with the
financing through Sukuk. The primary chapter is the presentation which centres out the common
information around the thought in conjunction with the company. The targets of the research
generally has been talked around in this distribute another to the research confinements. Other
than, it in improvement highlights the research questions near to point and targets of the
research. Insides the second chapter, it contain of composing format which centres out the
components that are to be tended to insides the research. It connect of openings and threats
connecting appraisal of competitive advantage and techniques for moving forward the execution.
In chapter three, it highlights the strategy which centres out the methodologies through which the
research has been conducted. It sets the considering, approach, and organize, information
collection method and test of the research approximately sheds light. The fourth chapter joins the
results around and disclosures where the results nearly approximately are to be studied and
checked on as per the current circumstance which it highlights the looking over, evaluation,
openings, threats and competitive technique. Inside the final chapter, it deals with the conclusion
adjacent recommendation and utilization with the concluding thoughts have been said at the side
tending to the destinations and certain suggestion. The proposition that have been outlined would
offer help the company to manage with the dangers and challenges that are going up against in
current circumstance.

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Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Background of the Study.......................................................................................................7
1.2 Problem Statement.................................................................................................................9
1.3 Aims and Objectives............................................................................................................12
1.3.1 Aims..............................................................................................................................12
1.3.2 Objectives.....................................................................................................................12
1.4 Research Questions..............................................................................................................13
1.5 Scope of the Research..........................................................................................................13
Chapter 2: Literature Review.........................................................................................................15
2.1 Concept of financing through issuance of sukuk.................................................................15
2.2 Benefits of financing through issuance of sukuk.................................................................21
2.3 Risks associated with financing through issuance of sukuk................................................26
2.3.1 Bond Associated risks...................................................................................................29
2.3.2 Sukuk associated risk....................................................................................................31
Chapter 3: Research Methodology................................................................................................33
3.1 Research Onion....................................................................................................................33
3.2 Research Philosophy............................................................................................................34
3.3 Research Approach..............................................................................................................35

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3.4 Research Design..................................................................................................................36
3.5 Data Collection process.......................................................................................................36
3.6 Data analysis method...........................................................................................................37
3.7 Ethical consideration...........................................................................................................37
3.8 Summary..............................................................................................................................38
Chapter 4: Data Analysis...............................................................................................................39
Qualitative data analysis............................................................................................................39
Theme 1: Benefits that are associated with financing through issuance of Sukuk....................39
Theme 2: Risks that are associated with financing through issuance of Sukuk........................48
Quantitative data analysis..........................................................................................................60
Chapter 5: Conclusion and Recommendation...............................................................................68
References......................................................................................................................................77

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Chapter 1: Introduction
Sukuk is the type of legal instrument which consist the overall characteristics of a
financial certificate and it is commonly referred as the Sharia or the bonds. Accounting and
Auditing Organisations for Islamic Financial Institutions (AAOIFI) have defined the term that
points out the securities of equal denomination which are associated with an organisation in their
representation of individual interest. As per Paltrinieri et al. (2015), the portfolio of eligible as
well as existing future assets is required to be included in their normal course of business. Sukuk
have been developed with the conventional bonds which are required to be considered as
permissible by the Muslims as the interest within the business is required to be associated with
the compliant activity. Sukuk securities might consist of the particle ownership within the
investment company and that is required to be included with effective conventional bonds.
Representing the ownership within the real assets is required to be associated with the regular
payment cases which might affect the assets based ownerships. There are different type of sukuk
which are based on their activity along with the structures of the Islamic contracts. According to
Nasir and Farooq (2017), these are also depends on the project of the sukuk and their method of
financing which are required to be associated within the conventional bonds. These types of
sukuk includes Murabaha, Ijara, Istisna, Musharaka, Istithmar and others. A Sukuk is a sort of
financial certificate which is primarily Islamic in nature and it is nearly comparable to the bond
that are accessible in western finance.
Sharia is additionally related with the laws of Islamic religion. As the western back bonds
has distinctive structure, so the issuer of sukuk offers the bond in a conventional way together
with bunch of financer. As stated by Aloui, Hammoudeh and Hamida (2015), the conventional
shape of paying the bond structure is basically not allowable that is basically utilized by the

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issuer at the time of obtaining of resources. This also incorporates the bunch of financial
specialists which comprise of partial ownership. The real contractual promise moreover
incorporates the buyback of the bonds inside long-term data and the esteem would be at most
elevated. The western debt instrument that is conventional in nature is completely nearly
comparative as sukuk in UAE and it is primarily made for connecting the returns at the side
obligations within the cash flow of the company. As mentioned by Elian (2015), the resources
that are being acquired by an organisation within the nation moreover incorporates the successful
dispersion approach which would help in keeping up of the financial certificate. Besides, it
cannot be utilized as the vehicle for speculation which moreover focuses out the instrument of
the financial instruments which would nearly proportionate to Western interest payment bond.
Sukuk securities might comprise of the particle ownership inside the speculation company which
is required to be included with viable ordinary bonds. Speaking to the proprietorship inside the
genuine resources is required to be related with the normal installment cases which might
influence the resources based proprietorships (Arundina, Omar and Kartiwi 2015). There are
different type of sukuk which are based on their action beside the structures of the Islamic
contracts.
These are moreover depends on the extension of the sukuk and their strategy of financing
which are required to be related inside the conventional bonds. As per the Global Islamic
Economic Report 2016-17, certain amount of assets are managed with the compliant manner in
the year 2014. Based on the view point of Alswaidan, Daynes and Pasgas (2017), the amount of
assets amounts to $ 4.004 trillion and among which $ 342 billion are made up of certain sukuk.
The short as well as medium term financial instrument provides the balance sheet of the Islamic
financial institution which are required to be associated with more liquidity and that legitimized

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the overall use of sukuk in the GCC countries. At first, the contemporary sukuk were issues on
the basis of the market and that are required to be associated with the issuance of the sukuk. As
the sukuk market went at the international level, then these are required to be included with the
corporate sukuk which falls under several jurisdiction. The portfolio of eligible as well as
existing future assets is required to be included in their ordinary course of trade (Hassan et al.
2018). Sukuk have been created with the conventional bonds which are required to be considered
as permissible by the Muslims as the intrigued inside the trade is required to be related with the
compliant action. Sukuk securities might comprise of the molecule proprietorship inside the
venture company which is required to be included with compelling ordinary bonds. Speaking to
the proprietorship inside the genuine resources is required to be related with the customary
payment cases which might influence the resources based possessions. As opined by Zulkhibri
(2015), there are diverse sort of sukuk which are based on their activity at the side the structures
of the Islamic contracts. These are moreover depends on the process of the sukuk and their
strategy of financing which are required to be related inside the conventional bonds.
1.1 Background of the Study
The benefits and the risk that are associated with financing through issuance of sukuk
points out the background nature which are required to be associated with the standardising the
growing market. As opined by Najeeb, Bacha and Masih (2017), the Islamic fixed securities that
are generally issues in the global market are required to be enhanced with the investment grade
and that highlights the overall duration of one year. These are the securities which are issued by
the government and that includes the conversion of local currency which are to be introduced
with certain aspects. As per the Islamic financial centre, the securities with the sukuk tends to be
bought as well as held within the trading of the financial securities. The niche segment remains

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the virtually traded sector which involves the process of trading that are done in the institutional
level. Moreover, the size of the secondary market points out the financial securities which points
out the several prohibitions that transacts the unethical goods and the services. As stated by
Hasan, Ahmad and Parveen (2019), the returns of the earnings includes the effective loan
contract that highlights the excessive uncertainty which are based on the chances of contracting
at the secondary market. There are certain principles on which the financing through sukuk are
based on that highlights the set of several prohibitions which highlights the debts of financing.
Representing the sukuk highlights the aggregate along with the undivided shares which
points out the bond holders that includes interests and principles. The investors that are related
with sukuk moreover focuses out the debt commitment that are not appeared by the bond issuer
as the possess guarantor of resources highlights the costs. As the speculator do not possess the
debt commitment which own the part of assets and that ought to be included with the bond
holders and get a certain portion of the profit which are straightforwardly related with the assets.
Based on the view point of Mohamed, Masih and Bacha (2015), a few of the characteristics are
included with sukuk primarily focuses out that both of the investors includes the payment terms
and a sukuk speculator get the benefit that are primarily created by the method of basic of the
resources. Both bonds and sukuk are basically issued to the financial specialists and both have to
be considered to be the more secure venture in general values. The general popularity of this
specific financial instrument that is sukuk has ended up popular in GCC nations within the year
2000 and it has been to begin with issued within the nation of Malaysia. As influenced by Ismath
Bacha and Mirakhor (2018), the GCC nations has received it within the taking after year which
takes after the rules and control as per the Islamic participation and their policies. Islamic law

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basically prohibits the intrigued from a certain sum of cash which need to be utilized within the
handle of disseminating the in general benefits of the resources.
It primarily offer assistance the speculators for working within the region that need to be
sketched out by the sharia and would get the obligations of financing. The sukuk basically speaks
to the total and unified offers which would be included within the possession within the
substantial resources and its connection with the particular action of its investment. As per
Maghyereh and Awartani (2016), the Islamic fixed securities that are generally issues within the
worldwide market are required to be improved with the investment review which highlights the
generally length of one year. These are the securities which are issued by the government which
incorporates the change of neighbourhood money which are to be presented with certain angles.
As per the Islamic financial centre, the securities with the sukuk tends to be bought as well as
held inside the exchanging of the financial securities. As stated by Sclip et al. (2016), the niche
section remains the for all intents and purposes traded sector which includes the method of
exchanging that are worn out the regulation level. Additionally, the measure of the secondary
market focuses out the financial securities which focuses out the a few disallowances that
transacts the unscrupulous products and the administrations. The returns of the profit
incorporates the successful credit contract that highlights the over the top vulnerability which are
based on the chances of contracting at the secondary market.
1.2 Problem Statement
The problem that is associated with the research mainly points out the benefits and the
risks that are associated with the issuance of sukuk. The appreciation of the general interest
highlights the assets that points out the backing method which are required to be included with
certain aspects. The ownership of the assets mainly involves with the bonds that points out the

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overall debt obligation which are to be associated with non-financial business complaints
(Mohamed 2016). The similarities with the bond mainly highlights that the bonds are sold to the
investors in which they receives the payment within the day of maturity. These are intended to
provide the investments which are less risk than the equities of the companies for balancing the
portfolio investment. The idea of the investors involves certain risk that are associated with the
issuers along with the bonds that are sold by the brokers and the agents in their normal course of
business. As opined by Naifar and Hammoudeh (2016), the disclosure of the document is to be
associated with the prospectus that points out the securities which are selling in the issuer of the
sukuk bonds. The trust certificates that are associated with the bonds are mainly governed by the
western law which are mainly structured as per the original law. The streams of the payment also
involves with the involvement of asset ownership and these are to be associated with the
organisations which creates an off shore trusted certificates.
The inclusion of asset ownership incorporates the bonds basically focuses out the debt
obligation which have to be related with the speculators beside the payment streams. Based on
the view point of Rafay, Sadiq and Ajmal (2017), the trust certificate are basically administered
by the western law which need to be organized as per the law of the nation which is lovely much
complicated in nature. The associated organisation raises the stores that got to be made with the
offshore believe certified issues alongside the speculators that highlights the payment streams.
The company that raises stores primarily issues they believe certificates which got to be included
with the financing agreement within the GCC nations. Sukuk is additionally referred as the trust
certificate which have to be related with the investors and those ought to be included with the
similar kind of bonds. Because it could be a sort of Islamic financial certificate, so it comprise of
certain rules and direction which have to be taken after during the method of bond profitability.

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As influenced by Ahmed, Islam and Ariffin (2015), it is generally acknowledged for the
intrigued rate beside the resources that included within the inclusion of backing strategy. Sharia
are too known as the resource backing resources which got to be included with the bonds which
may be financial as well as non-financial trade complaints. Islamic law essentially disallows the
interested from a certain sum of cash which ought to be utilized inside the handle of dispersing
the in common benefits of the assets. According to Alam, Duygun and Ariss (2016), it essentially
offer assistance the speculators for working inside the locale that have to be sketched out by the
sharia and would get the obligations of financing. The sukuk essentially talks to the whole and
bound together offers which would be included inside the ownership inside the significant assets
and its association with the specific activity of its venture.
The Islamic settled securities that are for the most part issues inside the around the world
advertise are required to be progressed with the speculation audit which highlights the for the
most part length of one year. These are the securities which are issued by the government which
consolidates the alteration of neighbourhood cash which are to be displayed with certain points
(Ibrahim 2015). The short as well as medium term financial instrument gives the balance sheet of
the Islamic financial institution which are required to be related with more liquidity which
legitimized the in general use of sukuk within the GCC nations. These are in addition depends on
the expansion of the sukuk and their procedure of financing which are required to be related
interior the conventional bonds. The western obligation instrument that is customary in nature is
totally about comparative as sukuk in UAE and it is fundamentally made for interfacing the
returns at the side commitments inside money stream of the company. As per Ahroum and
Achchab (2017), the assets that are being procured by an association inside the country besides
consolidates the effective scattering approach which would offer assistance in keeping up of the

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financial certificate. As the western back bonds has unmistakable structure, so the backer of
sukuk offers the bond in a routine way alongside bunch of financer.
1.3 Aims and Objectives
The aims and objectives of the research which focuses on the benefits and risks that are
associated with issuance of sukuk are mentioned as follows.
1.3.1 Aims
The aim of the research proposal is to point out the benefits and the risk that are
associated with financing through issuance of sukuk in the GCC countries. Moreover, it also
shed light on the impact of the financial certificates and the trust certificates that are associated
with the bonds.
1.3.2 Objectives
The main objectives of this research proposal is to highlights the benefits and limitation
that are associated with financing through issuance of sukuk in the GCC countries. The elective
civil structure of the law is additionally pointed at the situation which ought to be related during
the profiting of the financial certificates. It also highlights the hazard that might the resources
that are included during the method of actualizing the financial certificates. Based on the view
point of Lahsasna, Hassan and Ahmad (2018), the data that are utilized for the method of
financing or the Islamic bonds has also been highlighted within the research by the sukuk. The
appreciation of the common intrigued highlights the resources that focuses out the backing
strategy which are required to be included with certain perspectives. The possession of the
resources basically includes with the bonds that focuses out the in general debt obligation which
are to be related with non-financial trade complaints. The likenesses with the bond primarily

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highlights that the bonds are sold to the financial specialists in which they gets the instalment
inside the day of development.
1.4 Research Questions
The following are the research questions that have been gathered from different sources
about the benefits and risks which are associated with financing through issuance of susuk in
GCC countries.
1. What are the benefits of financing through susuk?
2. What are the risks associated with financing by issuance of susuk in GCC countries?
1.5 Scope of the Research
The research is totally based on the benefits and risks that includes the issuance of
finance of susuk. The research points to set up a modern basic discover definition for the sukuk
nature and beginning, where the researcher who has never listened of sukuk might see the
considerable conception behind these extraordinary instruments. At the same time the researcher
objective is to cope all the impediments, risks, challenges that might limit the sukuk from
abusing their promising openings, basically, by distinguishing and analysing these obstacles.
According to Rahim and Ahmad (2015), the certificates that have the in general rise to esteem of
the unified ownership also incorporates the ventures within the resources. Utilizing of the Sariah
guideline primarily includes the risks that are related with the financing and those ought to be
included with issuance within the GCC nations. Certain gap is show within the Islamic bonds
and the worldwide capital market which have to be related with the venture of money alongside
the resources for producing the benefit. In spite of the fact that, the sukuk phenomenon have
been discussed numerous times during the few final years. As per Reboredo and Naifar (2017),

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there is still a strong got to bring a more profound understanding and clarification to these
complicated rebellious, as much as the imperious ought to interpret and dissect the current
market situation to recognize the powerful challenges and dangers, as well as to recognize the
energetic openings. This research is set within the objective of giving a clear comprehensive
summery of the complex current circumstance of the sukuk. As sukuk are asset-based rebellious,
research in this respect also gives a system for evaluating and overseeing hazard as well as
tending to the legitimate and administrative issues included in SPV creation, resources acquiring
and cash payments vehicle (Mukhlisin and Mustafida 2019). These contemplations shape the
premise of the research in assessing the working mode of sukuk structures and the basic risks of
each step of instrument.

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Chapter 2: Literature Review
This particular chapter mainly focuses on the literature review of the research in which
several articles and journals have been included for better outcome. It includes the current
knowledge and the substantive findings which have already been discovered by other authors.
Both theoretical as well as methodological contribution on the topic is to be included along with
summary and synthesis of the sources. This chapter also highlights the factors along with the
impacts which provides benefits and the risks associated with financing through sukuk. The
concept of financing along with benefits and the risks have been mentioned by the process of
issuance of sukuk.
2.1 Concept of financing through issuance of sukuk
The process of proving the funds for the activities in the business along with making
certain purchases and investing is coined as financing. It includes financial institutions such as
the banks and others which provides the total amount of capital to a business for starting their
business activity. This help the business in achieving their goals, objectives along with the
process of managing the activity. As per the view point of Saad, Haniff and Ali (2016), sukuk are
the certificates which are proportionate to the bonds or the Islamic bonds and these are basically
alluded within the GCC nations together with highlighting the by and large nature of the bonds.
The assets that are being obtained by an affiliation inside the country as well joins the practical
scattering approach which would offer assistance in keeping up of the financial certificate.
Furthermore, it cannot be utilized as the vehicle for hypothesis which besides centres out the
instrument of the money related devices which would nearly proportionate to Western interest
payment bond. The ordinary shape of paying the bond structure is essentially not sensible that is
fundamentally utilized by the underwriter at the time of procuring of assets (Amrani and Hamza

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2017). This in addition consolidates the assembling of speculators which include of fractional
proprietorship. The genuine legally binding promise moreover consolidates the buyback of the
bonds interior the long run data and the regard would be at standard. The western debt
instrument that is customary in nature is totally about comparable as sukuk in UAE and it is
basically made for interfacing the returns at the side obligations inside the cash stream of the
company.
The essential condition of issuance of Sukuk is the presence of resources on the adjust
sheet of the government, the financial specialist, the corporate body, the managing an account
and budgetary institution or any substance which needs to mobilize the money related assets. The
recognizable proof of appropriate resources is the primary, and arguably most fundamentally,
step within the handle of issuing Sukuk certificates (Yesuf 2016). Shariah contemplations
manage that the pool of resources ought to not exclusively be comprised of obligations from
Islamic financial contracts. Islamic law essentially forbids the interested from a certain sum of
cash which have to be utilized inside the method of dispersing the in general benefits of the
assets. It essentially offer help the examiners for working inside the zone that got to be laid out
by the sharia and would get the commitments of financing. The sukuk fundamentally talks to the
full and bound together offers which would be included inside the ownership inside the
unmistakable assets and its association with the specific activity of its investment. As per
Rahmany (2018), the believe certificate are fundamentally managed by the western law which
have to be organized as per the law of the country which is lovely much complicated in nature.
The related affiliation raises the stores that got to be made with the seaward accept certified
issues in conjunction with the speculators that highlights the portion streams. The company that
raises saves essentially issues they accept certificates which need to be included with the

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subsidizing attestation inside the GCC countries. Moreover, the type of Sukuk is also to be
included with the proper classification of the assets which includes the imperative note that
points out the issuance of trust certificates.
Sukuk has been characterized by the Islamic Development Bank as the identical of
ordinary bonds, within the Islamic Financial framework. Aloui, Hammoudeh and ben Hamida
(2015) have mentioned that sukuk donate the financial specialist a share of the resources, which
commensurate with cash streams and dangers. Hence, the disobedient follow to Islamic financial
principles, which disallow the burden of intrigued instalments. The Islamic Financial Services
Board gave very a satisfactory definition for sukuk, where it was characterized as “Islamic
bonds”, are certificates with each sakk speaking to a relative unified possession right in
substantial resources, or a pool of overwhelmingly substantial resources, or a trade wander. Be
that as it may, Sukuk, not at all like ordinary bonds, which as it were give possession of
obligation. These resources may be in a particular venture or speculation action in agreement
with Shariah rules and standards (Azman and Ali 2016). It was taken after by the issuance of
coasting rate Ijara Sukuk as well as pooled Sukuk by both corporate bodies and sovereigns in a
few nations. These Sukuk are based on Salam, Ijarah, Istisna, Istisna-cum-Ijarah and on the
premise of pooled portfolios. The Sukuk market has developed amid the past three a long time,
to begin with Bahrain issuing residential imperial fixed-rate Ijara and Salam Sukuk. The show
measure of the market of the Sukuk is assessed to be over 4 billion dollars developing at rate
more than 90%. This gauge does not incorporate the sum of the Malaysian household Islamic
obligation issues and the Bahraini Salam Sukuk issues. As per the view point of Borhan and
Ahmad (2018), the Salam Sukuk of Bahrain are month to month issues and are non-tradable. So
distant 40 issues of these Salam Sukuk have been made each one oversubscribed. The generally

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low number of issues had restrained generally liquidity within the markets as financial specialists
were slanted to hold on to their speculations. With the developing number of bigger corporate
issues being recorded within the investment portfolios.
As a part of an Islamic capital market, sukuk provides the main objectives which are
required to be associated with the collection of the capitals in the Sharia. It is required to be
associated with the introduction of the relationship that makes the issuance and the sale of bonds
within the similar kind of bonds in the capital market. On the other hand, similar securities help
in raising the long term capital which points out the maturity of the debt capital markets from the
money market. Bo, Ali and Saiti (2016) have mentioned that trading with the short term debt
instrument are divided into capital markets and equity capital markets which points out the tenor
of less a certain period of time. The market of sukuk falls within the debt capital market as they
are highlighted with the return from fixed income sukuk holder. Moreover, the capital market is
divided into two different segment which are primary market and secondary market and that are
required to be associated with the debt instrument. The investors that are associated with the
primary markets buys the securities which are issues for the first time and it is also important for
overall development of an economy. Kartiwi et al. (2018) have opined that the secondary market
of sukuk might lack of short term investment which are the biggest challenges that are faced and
these are required to be faced with misgiving the foundation of the liquidity risk. The liquidity of
Islamic finance faces some of the problems which might be the lack of assets that are available in
the market. Investment in the secondary market includes the assets that are required to be
associated with the industry professionals. It can also be seen that the largest factors that affects
the investments mainly pushes down the yield of the sukuk and slowing the long term growth of

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the industry (Elhaj et al. 2016). Creating the liquidity platform of the banks mainly welcomes the
attempt to address the issues that are faced by the financial institutions.
The trust certificate are essentially managed by the western law which ought to be
organized as per the law of the country which is lovely much complicated in nature. The related
affiliation raises the stores that got to be made with the seaward accept certified issues in
conjunction with the theorists that highlights the portion streams (Musari 2016). It can also be
seen that the biggest components that influences the ventures primarily pushes down the
surrender of the sukuk and abating the long term development of the industry. Making the
liquidity stage of the banks basically invites the endeavour to address the issues that are
confronted by the financial institutions. The company that raises saves fundamentally issues they
accept certificates which ought to be included with the subsidizing attestation inside the GCC
countries. Islamic law essentially forbids the charmed from a certain entirety of cash which
ought to be utilized inside the method of scattering the in general benefits of the resources
(Ghani 2018). It fundamentally offer help the examiners for working inside the zone that ought
to be laid out by the sharia and would get the commitments of financing. However, Islamic
financial framework is attempting to overcome this impediment since as he expressed: ' The
Malaysia-based International Islamic Liquidity Management Corp started attempting to fill that
crevice final year with issues of three-month sukuk; it presently has $1.35 billion exceptional.
The Jeddah-based Islamic Improvement Bank points to issue its to begin with short-term sukuk
this year. Besides, the capital market is separated into two distinctive section which are primary
market and secondary advertise which are required to be related with the debt instrument.
The financial specialists that are related with the primary markets buys the securities
which are issues for the primary time and it is additionally imperative for in general

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advancement of an economy. The secondary market of sukuk might need of brief term
speculation which are the greatest challenges that are confronted and these are required to be
confronted with second thought the establishment of the liquidity risk (ULUSOY and Mehmet
2018). The liquidity of Islamic fund faces a few of the problems which may be the need of
resources that are accessible within the market. Speculation within the secondary advertise
incorporates the resources that are required to be related with the industry experts. The sukuk
basically talks to the entire and bound together offers which would be included inside the
ownership inside the unmistakable assets and its association with the specific activity of its
investment. As a portion of an Islamic capital market, sukuk gives the most goals which are
required to be related with the collection of the capitals within the Sharia. It is required to be
associated with the presentation of the relationship that produces the issuance and the deal of
bonds inside the comparable kind of bonds within the capital market. On the other hand,
comparative securities offer assistance in raising the long term capital which focuses out the
development of the debt capital markets from the money market. Zain, Abideen and Ali (2017)
have stated that exchanging with the brief term debt instrument are separated into capital markets
and value capital markets which focuses out the tenor of less a certain period of time. The market
of sukuk falls inside the debt capital advertise as they are highlighted with the return from settled
income sukuk holder. It can moreover be seen that the biggest variables that influences the
investments basically pushes down the surrender of the sukuk and slowing the long term
development of the industry. Making the liquidity stage of the banks basically invites the attempt
to address the issues that are confronted by the financial institutions. It moreover highlights the
risk that might the assets that are included during the strategy of actualizing the financial
certificates. The information that are utilized for the strategy of financing or the Islamic bonds

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has too been highlighted inside the research of the sukuk. Uddin et al. (2015) have opined that
the appreciation of the common charmed highlights the assets that centres out the backing
procedure which are required to be included with certain points of view. These are in expansion
depends on the extension of the sukuk and their strategy of financing which are required to be
related insides the conventional bonds.
2.2 Benefits of financing through issuance of sukuk
The recent study that have been compiled has revealed that the issuance of sukuk within
the year 2001 to 2015 has reached the amount $ 767 billion and this information is revealed by
the International Islamic Financial Market. It has also been reported that more than 96 % of the
total issuance of sukuk are originated from the GCC countries. As per the view point of
Awaludin, Beik and Ismal (2016), the global list of the countries is being led by the Malaysia
that mainly issues around 56 % of total sukuk all around the world. This is followed by the
United Arab Emirates by 26 % and Indonesia by 6 % of the total issuance of sukuk. The Sharia
compliant debt instrument mainly points out the line that is required to be associated with the
principles and the guidelines by the governing Islamic scholars. Sukuk is the instrument that
mainly serves for the alternative of the conventional bonds which are required to be structured
for generating the overall returns for the available investors. The sukuk instrument mainly offers
the depositors rather than offering to interest that are prohibited in nature (Ashidiqi and Arundina
2017). As these instrument are attractive in nature and broad range of investors are quite
attracted towards it for investing in Sharia compliant instruments. Particularly in sukuk, the
income from the profit are fixed in nature which requires the investors for the predefined
intervals and that highlights the enjoyment of steady cash flow. It also provides some of the
secure along with fastest growing economies within the GCC countries which is to be

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represented by the traditional bonds and funds. There is no such lock in period of these
conventional bonds as these are complied with the other kind of investments. As mentioned in
the above part that sukuk are mainly issues in the period of 2001 and 2015 which highlights
around 61 % of the total sukuk (Duqi and Al-Tamimi 2019). These are also much safer than the
conventional bonds that are available in the current market condition.
The use of susuk within the current financial condition primarily offer assistance the
economics by creating the method of making as well as creating certain possibility by
manipulating the others. Additionally, the Islamic fund is additionally based on the execution
and the standards of equity and the reasonableness for superior accomplishment by ignoring the
Riba. As per Warsame and Ireri (2016), the financial specialists that partners with secondary
market is related with the speculators that looks into the market in a more efficient way which is
simple for liquidation. The financial specialists that are display within the secondary markets
basically focuses out the ventures that might get sell to discover the sukuk a great deal. The
secondary market of Islamic securities also incorporates the fetched of the certificates which
basically produced the benefit which have to be returned into a speedy rate of interest. Sukuk
plays an imperative part within the preparation of financing which act as the improvement within
the Islamic market at the side the banking system. As influenced by Elhaj, Muhamed and Ramli
(2018), complying with Sharia offer assistance in boosting the standard that would be
advantageous on the society at the side the economies. It also gives the huge financing ventures
that focuses out the open products which might not be conceivable for performing a few
financial exercises. Sukuk are idealize for financing as these can be embedded into the intrigued
based obligation without falling the generally esteem. It also makes sukuk a critical road as to

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highlight the riches redistribution at the side the social equity that have been accomplished inside
a certain period of time.
As these instrument are appealing in nature and wide extend of speculators are very
pulled in towards it for contributing in Sharia compliant instruments. Especially in sukuk, the
pay from the benefit are settled in nature which needs the financial specialists for the predefined
interims which highlights the satisfaction of consistent cash flow (Talahma 2015). It also
provides a few of the secure at the side quickest growing economies inside the GCC nations
which is to be spoken to by the conventional bonds and funds. There is no such lock in period of
these ordinary bonds as these are complied with the other kind of speculations. As specified
within the above portion that sukuk are basically issues within the period of 2001 and 2015
which highlights around 61 % of the overall sukuk. These are also much more secure than the
conventional bonds that are accessible within the current market condition. It has moreover been
detailed that more than 96 % of the entire issuance of sukuk are begun from the GCC nations
(Amaliah and Aspiranti 2017). The worldwide list of the nations is being driven by the Malaysia
that basically issues around 56 % of total sukuk all around the world. Usually taken after by the
United Arab Emirates by 26 % and Indonesia by 6 % of the entire issuance of sukuk. The Sharia
compliant obligation instrument basically focuses out the line that is required to be related with
the standards and the rules by the administering Islamic researchers. Sukuk is the instrument that
basically serves for the elective of the conventional bonds which are required to be organized for
producing the general returns for the accessible speculators. The sukuk instrument basically
offers the contributors instead of offering to interest that are denied in nature.
It also includes another crucial factor that saves the sukuk securities along with the assets
as they are anchored with the actual assets which uses the money in special investments. It is

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important for the investors that sukuk securities are generally preferred over the choice of fixed
deposits that are going to be enhances the overall rate of profit. This type of bond can offer up to
return of 5 % per annum for the same time period and which almost provides the inherent profit
risk (Brugnoni et al. 2017). Other risk such as liquidity risk and the default risk is to be provided
with these risks which somehow clears the sense of compliment for each other. Sukuk are
required to be added to the investment portfolio which mainly measures the risk as this might
overweight for certain time period. The probability of the risk that are associated with the bonds
might be low as these are grown with the popularity for the rapid growing Islamic industry.
According to Rauf (2016), investments in the GCC countries is also important and based on the
old rule of thumb which points out that the higher the rate of risk, the higher the rate of return.
Therefore, the overall popularity of sukuk is pointed towards the attractive investment which is
currently growing worldwide. These are safer than the conventional bonds as these are backed up
by the underlying assets and might be the part of genuine investment portfolio.
The advantage that are associated with sukuk includes the diversification of fund sources
in which sukuk bonds are the main sources for the revenue of a project that are mainly
undertaken by the government as well as corporate bodies. They holders of the sukuk are
generally provided with adequate amount of liquidity which allows themselves to trade freely in
the secondary market (Paltrinieri et al. 2019). Both creation and enhancement of the profiles are
made in the international market which belongs to the international rating agencies for boosting
up their profiles. Development of Muslim countries in their overall infrastructure is used for
construction of the airports and biogas plants. This act as the key to the success of the mega
projects such as the above mentioned instances. Price benchmarking is also another type of
advantage that is provided by issuing of sukuk in which the overall tradability allows to set a

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price in the as the indicator in the secondary market. Moreover, it also matures with the horizon
that allows the investors for confident about their overall security. It also allows with easy
transaction and clear settlement within the maturity date. The first instrument of the financial
market is the sukuk which points out the exchange organisation and that are to be associated with
preparation of the development of instruments (Sillah 2018). The common instrument with the
fixed earnings is to be highlighted with the economic report that might include the risk of the
investments. The joint investment funds is to be associated with the effective response that
allows the investors to invest on the bonds which would provide the benefits to the economy.
Other risk such as liquidity risk and the default risk is to be given with these risks which
some way or another clears the sense of compliment for each other. Sukuk are required to be
included to the investment portfolio which primarily measures the chance as this might
overweight for certain time period. The likelihood of the chance that are related with the bonds
can be low as these are developed with the popularity for the quick growing Islamic industry. As
opined by Muhmad, S.N. and Muhmad (2018), investments within the GCC nations is
additionally critical and based on the old rule of thumb which focuses out that the higher the rate
of hazard, the higher the rate of return. Subsequently, the in general popularity of sukuk is
pointed towards the appealing investment which is right now developing around the world.
These are safer than the ordinary bonds as these are sponsored up by the basic resources and may
be the portion of genuine investment portfolio. It moreover incorporates another vital factor that
spares the sukuk securities along with the resources as they are tied down with the real resources
which employments the money in extraordinary ventures. It is vital for the investors that sukuk
securities are by and large favoured over the choice of settled stores that are getting to be
upgrades the general rate of benefit. Bhuiyan et al. (2018) have stated that this type of bond can

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offer up to return of 5 % per annum for the same time period and which nearly gives the
inalienable benefit chance. The later consider that have been compiled has uncovered that the
issuance of sukuk inside the year 2001 to 2015 has come to the sum $ 767 billion and this data is
uncovered by the International Islamic Financial Market.
Price benchmarking is additionally another type of advantage that is given by issuing of
sukuk in which the overall tradability permits to set a price within the as the pointer within the
secondary market. Besides, it also develops with the skyline that permits the speculators for
certain almost their overall security. It moreover permits with simple exchange and clear
settlement inside the maturity date (Qizam and Fong 2019). The primary instrument of the
financial market is the sukuk which focuses out the trade association which are to be related with
arrangement of the advancement of instruments. The common instrument with the settled profit
is to be highlighted with the financial report that might incorporate the risk of the ventures. The
joint investment funds is to be related with the successful reaction that permits the speculators to
contribute on the bonds which would give the benefits to the economy. The advantage that are
related with sukuk incorporates the expansion of support sources in which sukuk bonds are the
most sources for the income of a venture that are primarily embraced by the government as well
as corporate bodies (Naifar 2018). They holders of the sukuk are generally given with
satisfactory amount of liquidity which permits themselves to exchange unreservedly within the
secondary market. Both creation and improvement of the profiles are made within the universal
advertise which has a place to the worldwide rating offices for boosting up their profiles.
Development of Muslim nations in their general foundation is utilized for development of the
airplane terminals and biogas plants. This act as the key to the success of the mega projects such
as the above specified instances.

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2.3 Risks associated with financing through issuance of sukuk
There are different types of risk that are associated with financing through issuance of
sukuk as these are mentioned within the modern economic literature. Sukuk securities are
permitted with the viewpoint of sharia and the assets which might not be accepted by the Islamic
people. The overall validity of sukuk are not dependent on the value of the assets as these are to
be associated with the sale of bonds in the secondary markets (Melzatia and Doktoralina 2018).
The possibility of increasing the value in the original assets is to highlight the bonds in the
original debts that requires the assistance from sale of debts. The similarities between the sukuk
and a bond is to highlight their possibilities to liquidate in the secondary market which might
affect their valuation at the end of the year. The credit ranking situation of the bonds is mainly
done by the ranking institutions which recently developed the designer and the offerings that are
offered to them. Some of the scholars have opined that the increase in the liquidity of the
originator mainly influences the total rate of return from the bonds which are mainly issued to
the public. The confidential contract to the bonds would be soon replaced by the cash as these are
directly associated with the originator corporation and that have to be included with such assets.
There is another solution through which the cost of financing is to be reduced and among that the
increase in total amount of credit might hamper the design and offerings (Abd Rahim and
Ahmad 2016). The possibility of turning the assets into securities might help in their
development which also focused in their developed economy. Moreover, the secondary market is
generally provided for trading with sukuk and increase its production with liquidation.
Funds that are generally raised incorporates the vital activities that basically makes a
difference the in general framework of the project. Selecting and managing the stores moreover
offer assistance in highlighting the key components that would be advantageous for the financial

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instrument and might drive to mismanagement. According to Kartiwi et al. (2018), the Islamic
capital market highlights the subsidizing scale which also focuses out the in general length of
assignment of financing with sukuk. The ordinary financing strategy fundamentally focuses out
the reserves that are utilized for the method of financing. It is additionally considered as one kind
of betting in prior days but now it has been considered as one of the foremost helpful way of
instalment. The financial instrument of Islamic bonds that are suited with the administration of
the stores regularly offers them on the secondary markets and those got to be related with the
liquidity of the assets. It additionally gives the broad financing ventures that centres out the open
items which might not be conceivable for performing a couple of financial exercises. Based on
the view point of Godlewski, Turk-Ariss and Weill (2016), sukuk are idealize for financing as
these can be inserted into the charmed based commitment without falling the by and huge regard.
It as well makes sukuk a critical road as to highlight the wealth redistribution in conjunction with
the social value that have been fulfilled inside a certain period of time. The utilization of susuk
inside the current financial condition fundamentally offer help the financial things by creating
the strategy of making as well as creating certain achievability by controlling the others.
The credit ranking circumstance of the bonds is basically done by the ranking institutions
which recently created the creator and the offerings that are offered to them. A few of the
researchers have opined that the increment within the liquidity of the originator basically impacts
the overall rate of return from the bonds which are basically issued to the public. The
confidential contract to the bonds would be before long replaced by the cash as these are
specifically related with the originator organization which have to be included with such
resources (Ahroum et al. 2018). There is another arrangement through which the cost of
financing is to be diminished and among that the increment in add up to sum of credit might

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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obstruct the plan and offerings. The possibility of turning the assets into securities might offer
assistance in their advancement which also centred in their developed economy. In addition, the
secondary market is generally given for exchanging with sukuk and increment its production
with liquidation. There are different sorts of risk that are related with financing through issuance
of sukuk as these are specified inside the present day economic literature. Sukuk securities are
allowed with the perspective of Sharia and the resources which might not be acknowledged by
the Islamic individuals. The general validity of sukuk are not subordinate on the esteem of the
resources as these are to be related with the deal of bonds within the secondary markets. The
possibility of increasing the esteem within the original resources is to highlight the bonds within
the original debts that requires the help from sale of debts (Awalludin and Al-Aidaros 2015). The
discoveries of the investigate focuses out the clients from the Islamic banks that are profoundly
persuaded for the socio financial components. The likenesses between the sukuk and a bond is to
highlight their conceivable outcomes to sell within the secondary market which might influence
their valuation at the end of the year.
The findings of the research points out the clients from the Islamic banks that are highly
motivated for the socio economic factors. The overall profitability of Islamic as well as the
conventional banks is determined by the use of accounting ratios which help in finding the
relationship between the two components in accounting. The rapid growth and growing
population of sukuk as well as Islamic capital are still under researched and severely laced by
some empirical analysis. The contribution among the industry players might be the reason among
the sukuk for maintaining the equal value for the conventional bonds and that points out the
premium nature. There are different types of risks that are associated with sukuk which are as
follows.

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2.3.1 Bond Associated risks
These are the risks that are directly associated with the bonds and considered to be safe
than the financial instrument. The risk of the return is one type of risk which is yielded by the
bonds and points out the inverse relation along with interest rate movement. As the rates of the
interest grows in the market, it decreases the prices in the market that highlights the inverse
relationship among each other. As long as the maturity of the bonds exists, the higher is the
potential rate of interest for maintaining the interest rate risk. According to Al-Sawwa and Ghi
(2015), the risk of default is also associated with the issuer in which they might not be able to
make regular payments which help in repaying the principle amount with some of the financial
institutions. It also evaluates in the credibility of bond users as most of them rely on the investors
and rating agencies. The downgrade risk is downgraded by the bond price which might drop
severely within a smaller period of time. The role of the rating agencies is also to be associated
with the recent financial crisis that might affect the valuation of the bonds along with facing
some of the serious financial problems. The risk that is associated with the risk of inflation also
points out the investors which bears the risk of the inflation due to the fixed income. In addition
to this, bonds are also associated with the liquidity risk that points out that bonds are less liquid
that the stocks. Investors of the bond faces some of their trade securities which are required to be
associated with the liquid nature for the lack of potential buyers. As influenced by Ahmed, Islam
and Alabdullah (2018), the risk of the foreign exchange is also directly associated with the bonds
as is it mainly issued with the foreign currencies and unfavourable currency fluctuations. This
mainly help in decreasing the initial value of the investment for the investors.
The part of the rating agencies is additionally to be related with the recent financial crisis
that might influence the valuation of the bonds together with confronting a few of the genuine

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financial problems. The risk that is related with the chance of swelling too focuses out the
investors which bears the chance of the expansion due to the fixed income (Ryandono 2018). In
expansion to this, bonds are also related with the liquidity risk that focuses out that bonds are less
liquid that the stocks. Investors of the bond faces a few of their trade securities which are
required to be related with the liquid nature for the need of potential buyers. As the rates of the
interest develops within the market, it decreases the costs within the market that highlights the
reverse relationship among each other. As long as the development of the bonds exists, the
higher is the potential rate of intrigued for keeping up the interest rate risk. The hazard of default
is additionally associated with the guarantor in which they might not be able to create regular
payments which offer assistance in reimbursing the guideline amount with a few of the financial
institutions (Billah 2019). It moreover assesses within the validity of bond clients as most of
them depend on the financial specialists and rating offices. The diminishing risk is minimized by
the bond cost which might drop seriously inside a littler period of time.
2.3.2 Sukuk associated risk
There are also similar kind of risk that are associated with the sukuk in which the interest
rate risk is also present. This is almost similar to fixed rate conventional bonds and faces most of
the risk as it is directly available to the interest rates for the availability in the secondary market.
The risk of reinvestment is also applicable for the fixed income bearer sukuk which are almost
similar to the certificates of the conventional debts (Saad 2019). The Sharia compliant instrument
are based on the real profits which are directly associated with the underlying of the underlying
of the assets and these types of risk can be reduced by only avoidance. The recent criticism of the
modern sukuk is to provoke the confusion that are required to be associated with the Islamic
capital market. Most of the issuance of sukuk refers to the conventional bonds that requires the

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extension of the Sharia ruling and might not consider the Islamic financial instrument. The
conventional bond holders generally receives the payment which are to be associated with the
investment and the percentage is to be determined from the principal amount. The payment of
sukuk is required to reflect the actual payment which includes the returns from the underlying
assets and that can only be managed by expecting the returns from the projects. The promise
returns from the equal market interest mainly attracts the investors which allows the distribution
of the ratios within the sukuk holders and the appointed managers (Mancini 2015). The actual
problem that arises with the expected ones includes the effective higher percentage of profit and
the bonus is used for better performance. Therefore, the current market is low then the managers
receives the premium amount which would highlight the false incentives that affects the interest
rates.
The conventional bond holders for the most part gets the payment which are to be related
with the investment and the rate is to be decided from the principal sum. As per Thajudeen
(2017), the payment of sukuk is required to reflect the genuine payment which incorporates the
returns from the underlying assets which can as it were be overseen by anticipating the returns
from the ventures. The guarantee returns from the break even with market interest primarily pulls
in the financial specialists which permits the distribution of the proportions inside the sukuk
holders and the designated supervisors. The real issue that emerges with the anticipated ones
incorporates the successful higher rate of benefit and the reward is utilized for way better
performance. The risk of reinvestment is additionally appropriate for the fixed income bearer
sukuk which are nearly comparable to the certificates of the routine obligations. The Sharia
compliant instrument are based on the real profits which are specifically related with the
fundamental of the basic of the resources and these sorts of chance can be decreased by only

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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evasion. As opined by Sukmana (2019), the later feedback of the present day sukuk is to incite
the confusion that are required to be related with the Islamic capital market. Most of the issuance
of sukuk refers to the routine bonds that requires the expansion of the Sharia administering and
might not consider the Islamic financial instrument.

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Chapter 3: Research Methodology
This particular chapter mainly focuses on the research methods that have been followed
in the research. It includes the philosophy that deals with the information that is to be collected
from the research along with holding the significant valuation data. The approach of the research
is also to be discussed which points out the methods that offers assistance within the overall
research. Design of the research have also been mentioned in the study that focuses on the
practical outlook by which, the research is to be followed. The process of data collected and the
sampling methods have also been mentioned in this chapter which focuses on how the data have
been derived or extracted from the sources.
3.1 Research Onion
Figure 3.1: Research Onion
(Source: Saunders et al. 2007)

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The research onion essentially centres out the expressive state of the research point
through which the investigator is required to take after for an effective procedure. The rationale
of the research is to be highlighted where it requires the in common rationale of the research
adjacent to certain strategy that are to be included inside the research. The allocation after step is
the research approach and it centres out the source that the approaches is required be made for
the research and those ought to be begun interior the research (Dreassi et al. 2016). Design of the
research in addition to be inspected and recognizes the strategy through which the arrangement
has been made for the research at the side showing out the significance. The strategy of data
collection for the foremost portion centres out the procedures or ways through which the data is
to be collected. Sampling methodology and sampling size centres out the for the most part degree
of the test through which the data is required to be collected for any basic research. Also, the
ethical thought highlights the ethics that have been taken after for collection of data which are
utilized for the research.
3.2 Research Philosophy
The strategy through which the important data is to be collected and inspected for the
benefits of the study. Epistemology basically contradict to doxology for incorporates assorted
sorts of rationale and the research. This particular research is based on positivism which
recommends that the research gives the positive data about the benefits and risk that are
associated with financing by issuance of sukuk. Positivism fundamentally holds the substantial
information approximately the research which gives the examined removed way better data
around the issues that have been raised inside the study. This typical study highlights the
properties and factors which highlights the way by which the analysis is utilized to be conducted
along with creation of considerations which would be profitable for the research (Rizvi and

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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Arshad 2015). The research deals with the achievability of the components that causes the
benefits and risk associated financing through issuance of sukuk. The research would layout the
research involvement and their intrigued along with future tries of the research. The most
reasoning that is related with the study is deductive which highlights the measures of the
components that influences the financing through issuance of sukuk. Research philosophy guides
the analyst to create a appropriate demonstrate. Three different parts, like, positivism,
pragmatism and interpretation are the key crucial viewpoints of a logically researched paper. The
subject accomplishes to get it the benefits and risks related with financing through issuance of
sukuk. The analyst has chosen elucidation reasoning to interpret the part of benefits and risks
related with financing through issuance of sukuk.
3.3 Research Approach
It is the approach and method that are required to be utilized inside the research which
centres out the major suspicions of the study. It as well highlights the strategy that offer point out
the research for particular wide presumptions and examination of the methodologies that are
required to be taken after all through the research. The point by point taking care of technique of
data collection is to be related with those are to be pointed by the interpretation of the research of
research. The issue of the research is to be tended to and the approach of the data in addition to
be pointed with the common research (Aziz and Yaumi 2019). In this particular research, the
presumptions that are made centres out the effective examination of the data that are being
collected for the study. In common, two sorts of approaches – inductive and deductive
approaches are connected for the research work. In terms of the research objective, deductive
approach is the perfect for the research work. Here, the analyst needs to find the variables
dependable for benefits and risk related with sukuk.

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3.4 Research Design
The plan of this particular research fundamentally planning the unmistakable sorts of
comes almost which are to be related with the research. Coordination of particular components in
a coherent way and in a reliable way is to be related with the study by the analyst. The issues that
are related with the research in addition to be recognized in this portion and those are to be
included with certain process. The research arrange fundamentally centres out the copy or the
blue print of collection adjacent to the measures and those are additionally to be inspected with
the data that have been collected. Different sorts of research arrange are appear inside the study
which centres out the practical arrange for researching around the possibility of benefits and risk
of sukuk (Arundina, Kartiwi and Omar 2016). Exploratory research plan, exploratory research
arrange and realistic research arrange are there three essential sort of research arrange which are
broadly utilized and open to any examiner. The design of the research is to be persistent which
focuses on the particular circumstances that associated with issuance of sukuk.
3.5 Data Collection process
Data collection process of the technique through which the suitable data are collected and
measured at the side the variable of interested. The efficient prepare which engages the
investigator to answer the research questions along with the test theory and evaluation of results.
The data that have been collected for the study is from secondary sources which proposes topics
are to be made for certain perspectives which is required to be inspected. The issues and
components is required to be recognized for collection of information in conjunction with setting
the destinations for in common handle of collection of data. Arranging is required to be done for
the approaches and methodologies for prevalent examination of the results beside looking at and
translating the data that have been collected from the sources. At last, the act on the result is to

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be included with the address that has been inquired from the sources. The data that have been
gathered for the literature review are mainly from books and from the research papers.
Meanwhile, it has been observed that quantitative data is the desired data type for this research
work. It includes the opinion of 50 respondents which consists of both male and female for some
questions.
3.6 Data analysis method
The information that is to be collected from the secondary sources is to be dissected in a
way of subjective examination. This basically centres on the subjects which is required to be
created by the use of secondary assets and the data which have been used for the reason of the
study. In research, two sorts of data analysis strategies are basically utilized which are qualitative
research and quantitative. Quantitative research basically goes with the essential research which
incorporates the overview questions and the respondents are required to reply them. In
quantitative research, quality information is to be utilized and in secondary sources subjects are
to be set up and examined. The study will be created utilizing the secondary data. Apart from
that, reputed journals and article reviews on business and economy can be used to illustrate the
analysis of the research paper.
3.7 Ethical consideration
It is one of the crucial portion of the research which have to be taken after in a particular
way and ought to be considered all through the study. All the respondents that have been
included inside the research are not compelled for collecting the data. All the data that have been
collected from the respondents are as per their will and no one of them are compelled to do so.
The data that have been collected are kept in a secure put at the side of making a difference from
Data Protection Act. All fundamental data have been collected in a moral way along with

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considering their esteem for the research. All the particular owners of the secondary information
have been recognized in a appropriate way. In this respect, the authenticity of the information
source should be clarified some time recently application into the research work. Each research
work is subject to certain moral issues which guarantee that uniqueness of the research work and
must be free from plagiarism.
3.8 Summary
This particular chapter centres out the research methodology which highlights the
methodologies that have been considered for the research. This particular investigate is based on
positivism which recommends that the research gives the positive data around the benefits and
chance related with sukuk. The point by point plan of procedure of data collection is to be related
with examination and those are to be pointed by the translation of the results of research. The
research arrange essentially centres out the copy or the blue print of collection adjacent to the
measures and those are in addition to be inspected with the data that have been collected. The
data that have been collected for the research is from secondary sources which suggests points
are to be made for certain points of view which is required to be inspected. All morals have been
taken after for the research in their specific way. Journals and article reviews on business and
economy can be used to illustrate the analysis of the research paper.

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Chapter 4: Data Analysis
This particular chapter mainly highlights the overall analysis of the data which have to be
collected from different sources and would be useful for the study. It mainly includes the data
from the secondary sources that is to be analysed in the form of themes for which the thematic
analysis is to be presented. The inspecting as well as modelling of the data is to be presented in
the chapter and the discovering of the data is to be associated with certain prospects for
supporting the decision making for the issues of the topic. The themes are based on the benefits
and the risk that are directly associated with the process of financing through sukuk. It also
includes quantitative data analysis which includes five close ended questions that are inquired to
the 50 participants.
Qualitative data analysis
Theme 1: Benefits that are associated with financing through issuance of Sukuk
The first theme starts with the overall characteristics of sukuk that are to be highlighted
with the meaning and the Sharia compliant funds. As per Saad, Haniff and Ali (2019), the right
of ownership in which the employees are associated with the sukuk which determines the piece
of paper that points out the remuneration. Sukuk started with several assets of an organisation
which depends on the finances and the assets for a particular time period and highlights the
procedures of financing. The new financial products enters the market mainly the secondary
market that highlights the remarkable growth in their normal course of business. The market of
sukuk is still not regulated in a proper way for which it affects the market in a negative way
several times. The study of the Islamic finance plays a crucial role in the current time which
includes the effective funds by the help of such financial instruments. The practical experience in

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the GCC countries and in their markets also points out as the debt instrument that might new
finances for the companies. The legal advisors of the GCC countries have staffed that sukuk are
the financial instruments which are one kind of alternative for the bonds that are available in the
secondary markets. It also highlights the assets which are to be built for dividing equal
ownership between the holders of the sukuk (Alamad 2019). The idea of sukuk have been
generated by explaining the investments which are divided by the real estates and certain
alternative incomes. These are the class assets which requires their own risk and that is to be
mitigated within the common time interval.
Keeping the management under control is additionally to be highlighted which
incorporates the successful control by their way and the funds is to be collected from the
compliant bonds. Ijarah sukuk are primarily redeemable and for the most part utilized for
creating higher yield than other bonds within the secondary market. The issue that lies presently
a days is to be upgrade the market bonds and can hold certain viewpoint which are required to be
related with the financial instrument (Ahmad and Rahim 2015). The potential for holding the
sukuk is the major issue that highlights the observational confirmations for the contracts and
stood next to the bonds for a long time period. The preparing and advancement of the contract
clarified that the compelling contrasts of the contracts majorly highlights the effect on the
different kinds of sukuk which are casually utilized within the GCC nations. Fixed income for
the market bond is to be related with the secondary market where a part of money is being
contributed for certain reason. The Islamic financial system is based on the concept of settled pay
which incorporates the Sharia issue which clears the perspective in a clean way. Creating an
instrument primarily offer assistance in pulling in the market which are related with the sharia
compliant (Onagun 2016). The issuance of sukuk are based on the resources which includes the

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era of resources and maintains a strategic distance from the unnecessary issues. The portion of
writing also specified that the sorts of sukuk and the foremost popular sort of sukuk is the Ijarah
sukuk. It primarily gets the support from the new accomplices or the shareholders for the proper
interface inside the management of business.
Fixed income for the market bond is to be associated with the secondary market where a
lot of money is being invested for certain purpose. The Islamic financial system is based on the
concept of fixed income which includes the Sharia problem and that clears the viewpoint in a
clean way. Developing an instrument mainly help in attracting the market which are associated
with the sharia compliant (Ahmad et al. 2019). The issuance of sukuk are based on the assets
which involves the generation of assets and avoids the unnecessary problems. The part of
literature also mentioned that the types of sukuk and the most famous type of sukuk is the Ijarah
sukuk. It mainly gets the fund from the new partners or the shareholders for the right interface
within the management of business. Keeping the management under control is also to be
highlighted which includes the effective control by their way and the funds is to be collected
from the compliant bonds. Ijarah sukuk are mainly redeemable and generally used for generating
higher yield than other bonds in the secondary market. The problem that lies now a days is to be
enhance the market bonds and can hold certain aspect which are required to be associated with
the financial instrument (Sherin 2015). The potential for holding the sukuk is the major problem
that highlights the empirical evidences for the contracts and stood beside the bonds for a long
time period. The training and development of the contract explained that the effective differences
of the contracts majorly highlights the impact on the different kinds of sukuk which are casually
used in the GCC countries.

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The study of the Islamic back plays a vital part within the current time which
incorporates the effective stores by the assistance of such financial instruments. The practical
involvement within the GCC nations and in their markets also focuses out as the obligation
instrument that might unused funds for the companies (Al-abedallat 2016). The lawful advisors
of the GCC nations have staffed that sukuk are the financial instruments which are one kind of
elective for the bonds that are accessible within the secondary markets. It too highlights the
resources which are to be built for separating equal possession between the holders of the sukuk.
The thought of sukuk have been created by clarifying the ventures which are partitioned by the
real estates and certain alternative incomes. These are the lesson resources which needs their
claim hazard which is to be moderated inside the common time interval. The first theme begins
with the generally characteristics of sukuk that are to be highlighted with the meaning and the
Sharia compliant funds. The right of proprietorship in which the employees are related with the
sukuk which decides the piece of paper that focuses out the compensation. Sukuk begun with a
few resources of an association which depends on the accounts and the resources for a specific
time period and highlights the strategies of financing (Mohamad et al. 2017). The unused
financial products enters the market primarily the secondary market that highlights the surprising
development in their typical course of trade. The market of sukuk is still not directed in a
legitimate way for which it influences the market in a negative way several times.
The contract that defines the sukuk is to be associated with the debt contract and that
highlights the trading of amount which is not allowed in the Islamic financial system. Ijarah is
one of the famous sukuk in the GCC countries and also less controversial than other types of
debts that are available in the secondary market. The development process of sukuk is also
associated with the Sharia compliant debts as they manages the whole area for finding the overall

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radical solution for the issues that might arise in the process (Ariff and Safari 2015). The current
temporary solution is to be associated with the convenient solution which associates with the
structures that are found in their solutions. Central banks are the main responsible financial
institutions which manages the structures and authorises the operation in the huge market. One of
the biggest contravention part is to measure the viewpoint of the capital guarantee that accepts
the investors to sell their debts instrument within the public. The legal advisors of the Sharia
compliant also measures the guarantee of sukuk that points out the advantages within the bond
holders (Rahim and Ahmad 2015). The ethical impact on the market of sukuk also includes the
faire justice for each parties along with the tightening up the regulation which might put greater
impact on the bonds that are aggressive in nature. The training and development department is
also associated with a legal advisor which affects the market in a negative way.
The sukuk are completely diverse from conventional bonds which are to be represented
in an obligation and in obligation. The Islamic fund is not straightforward within the perspective
of sukuk because it may be more steady and for the something which incorporates bonds and the
offers. These sukuk are more near to the so called redeemable inclination share as the timing and
the administration is closely related to redeemable inclination share (Ogunbado 2019). The
values or the offers that speaks to the interminable proprietorship of the resources is not required
to be confined inside an allocated time period. The bond holders primarily dedicates the offers
which ended up the characteristic proprietor of the existing offers that are accessible within the
Islamic finance institutions. As per the Sharia, the holders of the financial instrument should
never be obliged with the payment that might not be ensured inside the price of sukuk. The
returns from the sukuk is additionally related with the supervisors of the firm and makes its
attractive as these are add up to base on the fundamental resources. The contrasts with the

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structures are the bonds which based on the rules that essentially charges with viable sharia
based rules for sectioning the returns (Sharif and Abdullah 2018). The legislative sukuk is to be
issued with the method of emphasizing the significance and the benefit that have been earned
with viable payment after a settled time interval.
The returns from the sukuk is also associated with the managers of the firm and makes its
attractive as these are total based on the underlying assets. The differences with the structures are
the bonds which based on the rules that basically charges with effective sharia based rules for
segmenting the returns (Hastuti 2018). The governmental sukuk is to be issued with the process
of emphasizing the importance and the profit that have been earned with effective payment after
a fixed time interval. The sukuk are totally different from conventional bonds which are to be
represented in an indebtedness and in obligation. The Islamic finance is not simple in the
viewpoint of sukuk as it might be more stable and for the something which includes bonds and
the shares. These sukuk are more close to the so called redeemable preference share as the timing
and the management is closely related to redeemable preference share. The equities or the shares
that represents the eternal ownership of the assets is not required to be restricted within an
allocated time period (Radzi and Shaharuddin 2018). The bond holders mainly dedicates the
shares which become the natural owner of the existing shares that are available in the Islamic
finance institutions. As per the Sharia, the holders of the financial instrument should never be
obliged with the payment that might not be guaranteed within the price of sukuk.
The current temporary solution is to be related with the helpful arrangement which
partners with the structures that are found in their arrangements. Central banks are the most
dependable financial institutions which oversees the structures and authorises the operation
within the gigantic market. One of the greatest contravention portion is to degree the perspective

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of the capital ensure that acknowledges the speculators to offer their obligations instrument
inside the open (Baita and Daud 2019). The legitimate advisors of the Sharia compliant also
measures the involvement of sukuk that focuses out the preferences inside the bond holders. The
moral effect on the advertise of sukuk also includes the faire justice for each parties along with
the fixing up the direction which might put more prominent effect on the bonds that are
aggressive in nature. The preparing and advancement division is additionally related with a
legitimate advisor which influences the market in a negative way. The contract that characterizes
the sukuk is to be related with the obligation contract which highlights the exchanging of amount
which is not permitted within the Islamic financial system. Ijarah is one of the popular sukuk
within the GCC countries conjointly less disputable than other sorts of obligations that are
accessible within the secondary market. The advancement handle of sukuk is additionally
associated with the Sharia compliant obligations as they oversees the total range for finding the
in general radical arrangement for the issues that might emerge within the handle (Utami,
Trinugroho and Sergi 2019). The potential for holding the sukuk is the major issue that
highlights the experimental confirmations for the contracts and stood next to the bonds for a long
time period. The preparing and improvement of the contract clarified that the successful contrasts
of the contracts majorly highlights the effect on the different kinds of sukuk which are casually
utilized within the GCC nations.
The returns of the sukuk are totally attractive which mainly brings out the advantages or
the benefits that would be enjoyed by the sukuk holders. The differences in the benefits of the
structure is almost like the sharia which eventually brings the changes on the vital issuer of the
returns. Most of the sukuk are issued by the government which eventually creates the mess on
the amount that are required to be provided to the sukuk issuer (Ahmed, Islam and Amran 2019).

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The payment of profit in a quarter manner highly involves the overall amount of fund unlike the
conventional bonds which are not like sukuk. The total amount of payment might be delayed
which involves in the chargeable of penalty of certain amount which is to be borne by the sukuk
holders. This is the only opinion which makes sukuk more attractive than the conventional bonds
to the financial instrument holders. In a specific type of sukuk, there is something between the
bonds and the shares which are required to be associated with the redeemable preference shares
that makes close calls with the sukuk. The substantial differences is to be associated with the
sukuk which mainly involves the interface of the management with the company in their normal
course of business. A sukuk holder must of silent funder that funds certain amount of money on
the shares for expected returns (Keskin and Kantarcı 2015). The uniqueness of the bonds is also
to be highlighted that makes the effective description of the investment certificates among the
Islamic financial institutions. Within the last few years, the demand of the sukuk were constantly
rising as most of the financial bodies are based on these Islamic bonds.
Again the sharing of the contrasts comes in and makes the major highlights between the
two bonds that are required to be related with the current time. A few of the researchers have
specified that sukuk might not replace the bonds as both are distinctive in their claim way which
too pulls in distinctive sorts of investors for the financial institutions (Sadallah 2015). This might
not influence the secondary market as to progress it, more prominent potential is required by the
chance managers. The named risk supervisors are more centered towards the sukuk as these are
best within the target market and those need to be included with comparable kind of bonds.
These are much more complicated in nature as these are to be organized in a distinctive way for
issuing in each time. There are certain profound discussion as per the nature of sukuk which is
additionally crucial for understanding the chance for the financial instrument holders. The results

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of the sukuk had been dropping at a quick rates which basically results in editing down the past
from the sharia law which happens to be included with keeping up the financial disobedient. The
overseeing of the reserves that is between the reserves and the sukuk is to be associated with the
contracts that do not bargain with certain aspect such as the concept of sharing (Wong and
BHATTI 2019). Meanwhile, the inclination offers might get closer to the ordinary bonds which
moreover act as the financial instrument for the Islamic financial institutions. Typically the as it
were conclusion which makes sukuk more attractive than the customary bonds to the financial
instrument holders. In a particular sort of sukuk, there is something between the bonds and the
offers which are required to be related with the redeemable preference offers that produces near
calls with the sukuk.
The results of the sukuk had been dropping at a fast rates which mainly results in
cropping down the past from the sharia law and that happens to be included with maintaining the
financial instruments. The managing of the funds that is between the funds and the sukuk is to be
associated with the contracts that do not deal with certain aspect such as the concept of sharing.
In the meantime, the preference shares might get closer to the conventional bonds which also act
as the financial instrument for the Islamic financial institutions (Billah 2019). Again the sharing
of the differences comes in and makes the major highlights between the two bonds that are
required to be associated with the current time. Some of the scholars have mentioned that sukuk
might not replace the bonds as both are different in their own way which also attracts different
types of investors for the financial institutions. This might not affect the secondary market as to
improve it, greater potential is required by the risk managers. The appointed risk managers are
more focused towards the sukuk as these are more preferable in the target market and those have
to be included with similar kind of bonds. These are much more complicated in nature as these

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are to be structured in a different way for issuing in each time (Uddin, Afroz and Suzuki 2018).
There are certain deep discussion as per the nature of sukuk which is also vital for understanding
the risk for the financial instrument holders.
This is the only conclusion which makes sukuk more appealing than the conventional
bonds to the financial instrument holders. In a particular type of sukuk, there is something
between the bonds and the offers which are required to be related with the redeemable
inclination offers that creates near calls with the sukuk. The considerable contrasts is to be
related with the sukuk which basically includes the interface of the administration with the
company in their ordinary course of commerce (Khoiruddin 2016). A sukuk holder must of silent
funder that stores certain amount of cash on the shares for anticipated returns. The uniqueness of
the bonds is additionally to be highlighted that creates the compelling portrayal of the venture
certificates among the Islamic financial institutions. Within the final few years, the request of the
sukuk were always rising as most of the financial bodies are based on these Islamic bonds. The
returns of the sukuk are completely appealing which basically brings out the focal points or the
benefits that would be delighted in by the sukuk holders. The contrasts within the benefits of the
structure is nearly just like the sharia which eventually brings the changes on the crucial issuer of
the returns. Most of the sukuk are issued by the government which in the long run makes the
mess on the sum that are required to be given to the sukuk issuer (Ramli, Sulaiman and Basary
2019). The amount of benefit in a quarter way exceedingly includes the in general sum of
finance unlike the customary bonds which are not like sukuk. The overall sum of payment can be
deferred which includes within the chargeable of punishment of certain sum which is to be borne
by the sukuk holders.

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Theme 2: Risks that are associated with financing through issuance of Sukuk
The second theme starts with the risks, limitations and the challenges with the sukuk
along with summarising the facts that points out the legal central authority of the structure. The
different structures of the sukuk mainly points out the facts that might not be standardised and
certain arguments affects the nature of the financial instruments. The Islamic financial
institutions have declared that bonds of the Gulf countries do not really comply with the 80 % of
the Islamic law and that are required to be associated with the sharia compliant (Shahsavari
2019). Most of the critical condition mainly prevents the sukuk in their Sharia compliant which
might generate some of their Riba and guarantee the capital condition. The people of GCC
countries are losing hope along with their confidence for the Islamic products and dealing with
default option of different companies. The main problem or the risk that is associated with sukuk
is that it do not have a specific liquid market to shift their debt which makes it easier to sell the
securities to the potential buyers. The companies that do not deal with Islamic bonds or the
sukuk might find the similar way before the financial crisis along with other circumstances
(Mohamed 2019). The standardization of the problem mainly focuses on the issuance of each
sukuk to the potential buyers as per the board or the committee.
The impact of the sukuk at the higher level also makes it less demanding for the bonds to
require the put inside the open and makes superior benefit than the conventional bonds. It
moreover associates with another risk that is chance of liquidity which makes the difference for
having a great sukuk within the hand of the financial instrument holders (Hosen, Kebir and
Foong 2018). The method of issuing is primarily talked by the lawful advisors who is dependable
for managing the financial debts that are related with the bonds. One of the greatest risk that is
related with sukuk is the devaluation of resources as per the see point of legitimate viewpoint. As

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the market of sukuk is exceptionally powerless as compared to bonds so, a few of the directions
might come in their benefits that requires the time for total develop and create. The chance of
remote trade is to be taken into consideration on the premise of the bonds that face risk. The
main problem that is related with sukuk is to get it that it would normally show up as per the
Sharia board and the committee that would set the general structure of the Islamic bonds. The
IMF regulations are basically making harder choice for the competing with sukuk bonds which
competes with the ordinary bonds within the GCC nations (Utami and Irawati 2018). It moreover
ignores the extraordinary structures of sukuk and tallies the risk that are straightforwardly related
with it. That sort of risk that is confronted by the sukuk is the market risk because it is add up to
different from other dangers additionally distinctive from the structures of routine bonds. The
interest risk as well as the credit risks is additionally related with it and in this way makes
accounting with the outside exchange risk.
The main problem that is associated with sukuk is to understand that it would naturally
appear as per the Sharia board and the committee that would set the overall structure of the
Islamic bonds. The IMF regulations are mainly making harder decision for the competing with
sukuk bonds which competes with the conventional bonds in the GCC countries. It also neglects
the special structures of sukuk and counts the risk that are directly associated with it (Al-Raeai,
Zainol and Rahim 2019). That type of risk that is faced by the sukuk is the market risk as it is
total different from other risks and also different from the structures of conventional bonds. The
interest risk as well as the credit risks is also associated with it and thus makes accounting with
the foreign exchange risk. The effect of the sukuk at the higher level also makes it easier for the
bonds to take the place within the public and makes better profit than the traditional bonds. It
also associates with another risk that is risk of liquidity which makes the difference for having a

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good sukuk in the hand of the financial instrument holders. The process of issuing is mainly
talked by the legal advisors who is responsible for managing the financial debts that are
associated with the bonds. One of the biggest risk that is associated with sukuk is the
depreciation of assets as per the view point of legal aspect (Karamah et al. 2018). As the market
of sukuk is very weak as compared to bonds so, some of the regulations might come in their
benefits that requires the time for complete grow and develop. The risk of foreign exchange is to
be taken into account on the basis of the bonds that face risk.
Most of the critical condition basically anticipates the sukuk in their Sharia compliant
which might produce a few of their Riba and ensure the capital condition. The individuals of
GCC nations are losing trust in conjunction with their certainty for the Islamic products and
managing with default option of diverse companies (Haque et al. 2017). The most issue or the
chance that is related with sukuk is that it do not have a particular fluid market to move their debt
which makes it simpler to offer the securities to the potential buyers. The companies that do not
deal with Islamic bonds or the sukuk might discover the comparable way some time recently the
financial crisis at the side other circumstances. The standardization of the issue primarily centers
on the issuance of each sukuk to the potential buyers as per the board or the committee. The
second theme begins with the risks, limitations and the challenges with the sukuk in conjunction
with outlining the facts that focuses out the lawful central authority of the structure. The different
structures of the sukuk basically focuses out the truths that might not be standardised and certain
contentions influences the nature of the financial instruments (Halim, How and Verhoeven
2017). The Islamic financial institutions have pronounced that bonds of the Gulf nations do not
really comply with the 80 % of the Islamic law which are required to be related with the sharia
compliant.

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One of the biggest effort which makes it unreal for the derivatives to be included with the
fund in their overall process of operation in GCC countries. The above mentioned liquidity risk
is also associated as it focuses on having a good sukuk along with not having the ability for
utilizing them in a correct way. The appointed legal advisors of the financial institutions mainly
highlights the issuing process which is totally different from one another (Laila, Hasib and
Anshori 2018). The process of issuing the sukuk is more complicated than issuing a bond as
bonds are quite simple in nature and holds the easy process for issuance. A set of SPV is required
which might be associated with the independent company along with acquiring the assets that are
required for issuing of sukuk. The market of sukuk are weak in the secondary market as these are
appointed by the account manager of the company. The training and development department
opined that most of the risk that are associated with sukuk are generally related to the contract
itself (Nabi, Islam and Bakar 2016). The sukuk also face the challenges within the environment
that provides benefits with the conventional bonds and affects its structure from the beginning.
The Islamic bank also supports the funding system that requires the general bonds as well as the
sukuk for intimating over the conventional bonds.
The manager is required to be concurred with the lawful advisor by indicating out another
chance that are confronted by the sukuk inside the complicated structures. This specific handle is
long in nature additionally costly which needs lots of funds for keeping up the method at the side
the structures. The fetched of the sukuk within the secondary market are very tall as compared
with the bonds beside successful market appetite for the bonds (Aloui, Hammoudeh and Hamida
2015). The effect of rare issuance is to be pointed by the sukuk advertise which includes the
craving of the market that are profoundly fulfilled. At this point of time, all of the sukuk
guarantor are oversubscribed at the side the viable point of vision in their focused on market.

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Government are considered as the primarily backer of the sukuk as government plays the major
part within the financial market of GCC nations. The sukuk evaluation is additionally crucial for
the financial institutions because it includes the resources which are progressing to be
deteriorated by measuring the potential risk (Benaicha, Qasem and Kassim 2019). The risk that
are related with directors includes the unsystematic chance which is to be displayed in a diverse
way that might not influence the typical individuals beside their stores. The other chance that is
related to the financial solution includes the truths which relates to the secondary market and
exchanging is to be related with sukuk. The administration of the chance are specifically related
with the inadequacies of the bonds which too requires very a good attention for its viable benefits
in its nature. The chance of liquidity is not to be kept aside which focuses out the result of
understanding the matter along with the duty of the sorting out the sukuk and its market (Bolo
and Sahebgharani 2018). There would be both orderly as well as unsystematic chance that might
bring out the contrast of the appraisal of bonds which are accessible within the secondary market.
The management of the risk are directly associated with the shortcomings of the bonds
which also requires quite a good attention for its effective benefits in its nature. The risk of
liquidity is not to be kept aside which points out the result of understanding the matter along with
the responsibility of the organising the sukuk and its market (Lahsasna, Hassan and Ahmad
2018). There would be both systematic as well as unsystematic risk that might bring out the
difference of the assessment of bonds which are available in the secondary market. The sukuk
assessment is also vital for the financial institutions as it involves the assets which are going to
be depreciated by measuring the potential risk. The risk that are associated with managers
involves the unsystematic risk which is to be presented in a different way that might not affect
the normal people along with their funds. The other risk that is related to the financial solution

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involves the facts which relates to the secondary market and trading is to be associated with
sukuk (Ismail and Arundina 2019). The manager is required to be agreed with the legal advisor
by pointing out another risk that are faced by the sukuk within the complicated structures. This
particular process is lengthy in nature and also expensive which requires lots of funds for
maintaining the process along with the structures. The cost of the sukuk in the secondary market
are quite high as compared with the bonds along with effective market appetite for the bonds.
The effect of rare issuance is to be pointed by the sukuk market which involves the appetite of
the market that are highly satisfied. At this point of time, all of the sukuk issuer are
oversubscribed along with the effective point of vision in their targeted market. Government are
considered as the mainly issuer of the sukuk as government plays the major role in the financial
market of GCC countries.
The method of issuing the sukuk is more complicated than issuing a bond as bonds are
very simple in nature and holds the simple prepare for issuance. A set of SPV is required which
may well be related with the independent company in conjunction with securing the resources
that are required for issuing of sukuk. The market of sukuk are powerless within the secondary
market as these are named by the account manager of the company. The preparing and
advancement office opined that most of the risk that are related with sukuk are by and large
related to the contract itself. The sukuk moreover confront the challenges inside the environment
that gives benefits with the conventional bonds and influences its structure from the beginning
(Hamzah, Ishak and Rasedee 2018). The Islamic bank moreover supports the financing
framework that requires the common bonds as well as the sukuk for hinting over the customary
bonds. One of the greatest effort which makes it unbelievable for the subsidiaries to be included
with the support in their generally prepare of operation in GCC nations. The over specified

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liquidity risk is additionally related because it centres on having a great sukuk besides not having
the capacity for utilizing them in a adjust way. The appointed legal advisors of the financial
institutions primarily highlights the issuing prepare which is completely distinctive from one
another. The impact of the sukuk at the higher level also makes it less demanding for the bonds
to require the put inside the open and makes way better benefit than the traditional bonds. It also
partners with another chance that is chance of liquidity which makes the contrast for having a
great sukuk within the hand of the financial instrument holders. The method of issuing is
primarily talked by the legitimate advisors who is capable for overseeing the financial debts that
are related with the bonds.
Government are the main issuer as government mainly uses the sukuk in massive projects
such as building of bridges, airports along with development of overall infrastructure of the
country. The structure of the sukuk is to be looked at more debatable which brings out the
tremendous growth in the secondary market along with maintaining the gap between the demand
and supply of the issuance of sukuk. Market expansion in the Islamic financial system is to be
noticed on the demand that have increased in their normal course of business. As the legal
advisors said that the demand of the sukuk have increased in recent years for the financial
institutions along with using the major banks. There might be a huge profitability in the system
of Islamic finance which are more specifically associated with in the GCC countries (Khartabiel
et al. 2019). It also help in holding the culture of the secondary market as it impressed the risk of
liquidity that are associated with the bonds. The amount of debt within the Islamic law might not
allow the same thing for sukuk as compared with the conventional bonds and that points out the
face value which are going to be incorporated with it.

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Issuing of the financial instrument are to be faulted by the Islamic nations and increments
the significance of Islamic back law. There is a certain phenomenon which is curiously within
the portion of keeping up the market among the sukuk holders and might not need to do trade
with is Islamic bonds. The risk of liquidity is not to be kept aside which points out the result of
understanding the matter at the side the obligation of the sorting out the sukuk and its market.
The other chance that is related to the financial solution includes the facts which relates to the
secondary market and exchanging is to be related with sukuk. The impact of uncommon issuance
is to be pointed by the sukuk market which includes the craving of the market that are highly
fulfilled. The interest free loan is required to be expanded on the premise of the goodwill and for
the reason of its welfare which are progressing to be included for certain purpose (Maspupah and
Hasanah 2016). The borrower are required to pay back the full sum of borrow inside a certain
period of time along with no intrigued which is its uncommon highlights. The sum of credit is
payable as per the request on the reimbursement sum which are attending to be related with the
bank or the lenders that anticipates the sum inside the apportioned time interval. The Islamic
time interval of the credit could be a sort of social administrations that basically permits the rich
for helping the destitute that are in require of a few kind of financial assistance. The clarification
of the tradability moreover centres on the influencing the promoting condition of sukuk which
are related with the Islamic finance for keeping up the condition which is not to create any kind
of profit.
The interest free loan is required to be extended on the basis of the goodwill and for the
purpose of its welfare which are going to be involved for certain purpose. The borrower are
required to pay back the total amount of borrow within a certain period of time along with no
interest which is its special features. The amount of loan is payable as per the demand on the

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repayment amount which are going to be associated with the lender or the creditors that expects
the amount within the allocated time interval. The Islamic time interval of the loan is a type of
social services that mainly allows the rich for helping the poor that are in need of some kind of
financial assistance. The explanation of the tradability also focuses on the affecting the
marketing condition of sukuk which are associated with the Islamic finance for maintaining the
condition which is not to generate any kind of profit (Ulfah, Aprilliani and Adirestuty 2019).
Issuing of the financial instrument are to be blamed by the Islamic countries and increases the
importance of Islamic finance law. There is a certain phenomenon which is interesting in the part
of maintaining the market among the sukuk holders and might not want to do business with is
Islamic bonds. The risk of liquidity is not to be kept aside which points out the result of
understanding the matter along with the responsibility of the organising the sukuk and its market.
The other risk that is related to the financial solution involves the facts which relates to the
secondary market and trading is to be associated with sukuk.
The effect of rare issuance is to be pointed by the sukuk market which involves the
appetite of the market that are highly satisfied. Market expansion within the Islamic financial
framework is to be noticed on the request that have expanded in their typical course of trade. As
the lawful advisors said that the request of the sukuk have expanded in later a long time for the
financial institutions along with utilizing the major banks. There may well be a tremendous
productivity within the system of Islamic back which are more particularly related with within
the GCC nations. It also offer assistance in holding the culture of the secondary market because
it impressed the chance of liquidity that are related with the bonds (Radzi and Muhamed 2019).
The sum of obligation inside the Islamic law might not permit the same thing for sukuk as
compared with the routine bonds which focuses out the face value which are progressing to be

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joined with it. Government are the main issuer as government primarily employments the sukuk
in gigantic ventures such as building of bridges, airplane terminals beside development of
generally framework of the nation. The structure of the sukuk is to be looked at more far from
being obviously true which brings out the colossal development within the secondary market at
the side keeping up the gap between the request and supply of the issuance of sukuk.
The amount of loan is the virtuous amount which would be beneficial for the bond holder
as they are interest free along with extending the goodwill. The borrower are required to pay
certain debts that points out the pay back of the amount that have been borrowed for certain
purpose along with maintaining the financial stability. The amount of loan is mainly payable at
demand which belongs to the repayment of the debts as per their obligations. During the
difficulty period of a debtor, the lender or the creditor is required to extend the overall time of
repayment that would make the difference in the payment of loan amount. In the Islamic finance,
the loan is only allowable for any kind of social service in which the risk would help the poor in
case of need of any kind of financial support (Noriza, Haniff and Ali 2018). The acceptance of
the tradability are acceptable in the market which are going to be associated with the sukuk. The
trade is only acceptable in the Islamic finance by following only one condition which are going
to be associated with the issuance of bonds. In recent years, it can be seen that a interesting factor
is to be pointed which mainly brings out the sukuk market among the holders. This would help
them in selling the sukuk before the time of maturity which should not include any kind of profit.
This mainly results in high yield of sukuk which generally generates the overall comparison with
other financial certificates that are available in the market. The distinguished opportunities are to
be found out which brings out the market reach and follows the queries that are associated with
the secondary market.

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The investors within the western nations beside the western financial institutions also
appears the most interest within the sukuk in its market which highlights the effective portfolio.
The intrigued in sukuk inside the worldwide context primarily draws in the unemployed
employees who are completely fascinated by the Islamic instruments. Summarising the financial
crisis might influence the Islamic financial framework which speaks to in both negative as well
as in positive way. The defaults amid the financial framework moreover focuses out the positive
bits of knowledge that are progressing to be assessed inside the consideration among the open for
broadening of financial instruments. The feedback that are confronted by the sukuk includes the
clashes among the sukuk holders in which a few individuals are attempting to gain a few benefit
(Hossain 2019). A few of the individuals are utilizing the sukuk fair as a financial instrument and
not implied for gaining a certain sum of benefit. There are certain reason that are behind the
international interest of the sukuk as they impact the focused on market. The individuals of the
nation basically utilize the stores for pulling in more number of individuals which brings out the
situation for commitment for the Sharia law. The designated managers have expressed that the
western nations do not utilize sukuk for drawing in the Islamic stores that are unemployed in
nature at the side measuring the negativity of sukuk market. The whole of commitment interior
the Islamic law might not allow the same thing for sukuk as compared with the schedule bonds
which centres out the face value which are advancing to be joined with it. Government are the
most guarantor as government basically businesses the sukuk in tremendous ventures such as
building of bridges, plane terminals close to advancement of general system of the country.
There are certain reason that are behind the international interest of the sukuk as they
effect the targeted market. The people of the country mainly use the funds for attracting more
number of people which brings out the situation for commitment for the Sharia law. The

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appointed managers have stated that the western countries do not use sukuk for attracting the
Islamic funds that are unemployed in nature along with measuring the negativity of sukuk
market. The investors in the western countries along with the western financial institutions also
shows the main interest in the sukuk in its market which highlights the effective portfolio. The
interest in sukuk within the global context mainly attracts the unemployed employees who are
totally interested in the Islamic instruments. Summarising the financial crisis might affect the
Islamic financial system which represents in both negative as well as in positive way (Ahmed,
Amran and Islam 2018). The defaults during the financial system also points out the positive
insights that are going to be evaluated within the attention among the public for diversification of
financial instruments. The criticism that are faced by the sukuk involves the conflicts among the
sukuk holders in which some people are trying to earn some profit. Some of the people are using
the sukuk just as a financial instrument and not meant for earning a certain amount of profit.
The acceptance of the tradability are satisfactory within the market which are aiming to
be related with the sukuk. The exchange is only acceptable within the Islamic fund by taking
after as it were one condition which are attending to be related with the issuance of bonds. In
later a long time, it can be seen that a curiously figure is to be pointed which basically brings out
the sukuk market among the holders. This would offer assistance them in offering the sukuk
before the time of development which ought to not include any kind of benefit. As per Ulfah,
Aprilliani and Adirestuty (2019), this basically comes about in tall surrender of sukuk which by
and large creates the by and large comparison with other financial certificates that are accessible
within the market. The recognized openings are to be found out which brings out the market
reach and takes after the questions that are related with the secondary market. The sum of
advance is the virtuous sum which would be useful for the bond holder as they are intrigued free

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along with expanding the goodwill. The borrower are required to pay certain obligations that
focuses out the pay back of the sum that have been borrowed for certain reason along with
keeping up the financial stability. Based on the view point of Hamzah, Ishak and Rasedee
(2018), the sum of advance is primarily payable at request which has a place to the
reimbursement of the obligations as per their commitments. During the trouble period of a
debtor, the loan specialist or the lender is required to extend the overall time of reimbursement
that would make the contrast within the payment of advance sum. Within the Islamic fund, the
credit is as it were passable for any kind of social benefit in which the hazard would offer
assistance the poor in case of require of any kind of financial support.
Quantitative data analysis
The provided part includes the questions that are inquired to the participants which are follows.
Q1. How far do you agree about the investment in sukuk are helpful for the economy?
Options
Total
percentage
Number of respondents Total respondents
Strongly agree 40% 20 50
Agree 20% 10 50
Neutral 20% 10 50
Disagree 10% 5 50
Strongly disagree 10% 5 50
Table 4.1: Responses for investment for sukuk in economy
(Source: Created by author)

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40%
20%
20%
10%
10%
Strongly agree Agree Neutral
Disagree Strongly disagree
Figure 4.1: Responses for investment for sukuk in economy
(Source: Created by author)
It centres out the research which provides generic data to the employees beside the
highlights benefits of investment in sukuk. Most of the members have agreed and backed other
alternative as the study utilized for benefits and risks associated with sukuk. Some of them acted
which the study have been not fulfilling general information which also highlights numerous
demerits towards the study. It in expansion shows up that the sukuk investment has been holding
the in common range to assist their investors.
Q2. How far do you agree that the impact of conventional bonds for economic
development?
Options
Total
percentage
Number of respondents Total respondents
Strongly agree 20% 10 50
Agree 40% 20 50

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Neutral 10% 5 50
Disagree 20% 10 50
Strongly disagree 10% 5 50
Table 4.2: Responses about the impact of conventional bonds for economic development
(Source: Created by author)
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
0% 5% 10% 15% 20% 25% 30% 35% 40%
Figure 4.2: Responses about the impact of conventional bonds for economic development
(Source: Created by author)
This chart specified centres on the respondents in this particular research highlights rough
estimation about their importance of conventional bonds. The bigger part of the participants have
agreed on this opinion with investment analysis along with financial planning which are
provided to them for the conventional bonds. It recommends that the investors are provided with
great assistance which would increment there in generic information in their return on
investment yield.

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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Q3. How far do you agree on the different types of sukuk investment that are provided to
investors?
Options
Total
percentage
Number of respondents Total respondents
Strongly agree 20% 10 50
Agree 30% 15 50
Neutral 10% 5 50
Disagree 30% 15 50
Strongly disagree 10% 5 50
Table 4.3: Responses about different types of sukuk investments that are provided to
investors
(Source: Created by author)
Strongly agree Agree Neutral Disagree Strongly
disagree
0%
5%
10%
15%
20%
25%
30%
35%
Figure 4.3: Responses about different types of sukuk investments that are provided to
investors

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
(Source: Created by author)
The information that have been shown above in a general sense about the sukuk
investment for the investors within the conventional investments. It primarily provides the
common presentation of the sukuk investment over the conventional bonds. It furthermore
highlights the preferences that are being given to the sukuk holders in their investment period. In
addition, approximately half of the members have opined unbiased around the sukuk investment
within the participants. It also highlights that the investment types is looking forward for
accepting the other investment within the working area.
Q4. How far do you agree on the importance of the financial goals by sukuk investment?
Options
Total
percentage
Number of respondents Total respondents
Strongly agree 40% 20 50
Agree 10% 5 50
Neutral 20% 10 50
Disagree 10% 5 50
Strongly disagree 20% 10 50
Table 4.4: Responses for importance of financial goals by sukuk investment
(Source: Created by author)

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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Strongly agree Agree Neutral Disagree Strongly
disagree
0%
5%
10%
15%
20%
25%
30%
35%
40%
Figure 4.4: Responses for importance of financial goals by sukuk investment
(Source: Created by author)
It suggests that the business have given improving financial goals on sukuk investment
along with the investment area and marked by the responses of the participants. The bigger part
of the participants has concurred with the opinions that highlights the investment area where the
sukuk investment provides financial goals to the investors. It focuses out that the investors are
liable for their people other than giving far better desire procedures on the investment areas of
the research. Sukuk investment behaviour of investors in GCC countries essentially centred on
hardship of items, cost, advancement and put on which the disclosure. Most of the members have
disagreed with the opinions that are provided to them for sukuk investment over conventional
investments.
Q5. How far do you agree that planning for finances plays a key role in investment?
Options Total Number of respondents Total respondents

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
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percentage
Strongly agree 24% 12 50
Agree 16% 8 50
Neutral 20% 10 50
Disagree 30% 15 50
Strongly disagree 10% 5 50
Table 4.5: Responses about planning for finances that plays key role in investment
(Source: Created by author)
24%
16%
20%
30%
10%
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
Figure 4.5: Responses about planning for finances that plays key role in investment
(Source: Created by author)
The mentioned figure on the over portion centres the sukuk investment that is given by
the investors of the GCC countries. Most of the members have opined with the variables and
those are given with adjustment of sukuk investment at the end of a time period. A handful of the

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people have completely oppose this idea with the bolsters that the study given adjustment of
worldwide sukuk investment that are given to the bond members interior their investment zones.

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Chapter 5: Conclusion and Recommendation
Accounting and Auditing Organisations for Islamic Financial Institutions (AAOIFI) have
characterized the term that focuses out the securities of rise to group which are related with an
association in their representation of individual interest. Sukuk have been created with the
customary bonds which are required to be considered as allowable by the Muslims as the
intrigued inside the trade is required to be related with the compliant activity. Representing the
proprietorship inside the genuine resources is required to be related with the customary payment
cases which might influence the resources based ownerships. These sorts of sukuk incorporates
Murabaha, Ijara, Istisna, Musharaka, Istithmar and others. A Sukuk could be a sort of financial
certificate which is fundamentally Islamic in nature and it is about comparable to the bond that
are available in western finance. This moreover consolidates the bunch of financial specialists
which include of halfway ownership. The western debt instrument that is routine in nature is
totally about comparative as sukuk in UAE and it is basically made for interfacing the returns at
the side obligations inside the cash stream of the company. Sukuk securities might include of the
molecule possession interior the hypothesis company which is required to be included with
practical ordinary bonds. There are distinctive sort of sukuk which are based on their activity
next to the structures of the Islamic contracts. These are in addition depends on the expansion of
the sukuk and their procedure of financing which are required to be related interior the ordinary
bonds.
The sum of resources sums to $ 4.004 trillion and among which $ 342 billion are made up
of certain sukuk. The brief as well as medium term financial instrument gives the adjust sheet of
the Islamic money related institution which are required to be related with more liquidity which
legitimized the generally utilize of sukuk within the GCC nations. There are different sort of

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sukuk which are based on their action at the side the structures of the Islamic contracts. The
Islamic fixed securities that are generally issues within the worldwide advertise are required to
be upgraded with the investment review which highlights the generally term of one year. These
are the securities which are issued by the government which incorporates the change of nearby
cash which are to be presented with certain angles. Besides, the measure of the secondary market
focuses out the financial securities which focuses out the a few prohibitions that transacts the
unethical goods and the administrations. There are certain standards on which the financing
through sukuk are based on that highlights the set of a few prohibitions which highlights the
debts of financing. Speaking to the sukuk highlights the total together with the unified offers
which focuses out the bond holders that incorporates interface and standards. As the examiner do
not have the debt commitment which possess the part of assets which got to be included with the
bond holders and get a certain portion of the benefit which are direct related with the resources.
The common ubiquity of this particular financial instrument that is sukuk has finished up
prevalent in GCC countries inside the year 2000 and it has been to start with issued inside the
country of Malaysia. It basically offer help the examiners for working inside the region that
ought to be outlined out by the sharia and would get the commitments of financing. The sukuk
essentially talks to the overall and bound together offers which would be included inside the
ownership inside the considerable assets and its association with the specific activity of its
venture. These are the securities which are issued by the government which consolidates the
alteration of neighborhood cash which are to be displayed with certain points. The returns of the
benefit consolidates the effective credit contract that highlights the over the best helplessness
which are based on the chances of contracting at the secondary market. The appreciation of the
common intrigued highlights the resources that focuses out the backing strategy which are

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required to be included with certain viewpoints. The proprietorship of the resources primarily
includes with the bonds that focuses out the in general obligation commitment which are to be
related with non-financial commerce complaints. The thought of the speculators includes certain
risk that are related with the guarantors at the side the bonds that are sold by the brokers and the
specialists in their typical course of trade.
The streams of the payment moreover includes with the inclusion of resource
proprietorship and these are to be related with the associations which makes an off shore trusted
certificates. The trust certificate are fundamentally managed by the western law which got to be
organized as per the law of the country which is exquisite much complicated in nature. The
company that raises stores essentially issues they accept certificates which have to be included
with the financing understanding inside the GCC countries. Sukuk in addition referred as the
believe certificate which have to be related with the speculators and those have to be included
with the comparable kind of bonds. Sharia are as well-known as the asset backing assets which
have to be be included with the bonds which may be financial as well as non-financial exchange
complaints. Islamic law basically refuses the interested from a certain entirety of cash which
need to be utilized interior the handle of scattering the in common benefits of the resources.
These are the securities which are issued by the government which solidifies the change of
neighbourhood cash which are to be shown with certain focuses. The western commitment
instrument that is standard in nature is completely almost comparative as sukuk in UAE and it is
in a general sense made for meddle the returns at the side commitments interior cash stream of
the company. It also highlights the danger that might the assets that are included amid the
strategy of actualizing the financial certificates. The information that are utilized for the strategy
of financing or the Islamic bonds has too been highlighted inside the research by the sukuk. At

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the same time the researcher objective is to manage all the obstructions, dangers, challenges that
might constrain the sukuk from abusing their promising openings, fundamentally, by recognizing
and dissecting these impediments.
Certain crevice is appear inside the Islamic bonds and the around the world capital
exhibit which got to be related with the venture of cash nearby the assets for creating the
advantage. This research is set inside the objective of giving a clear comprehensive summery of
the complex current circumstance of the sukuk. Sukuk are the certificates which are
proportionate to the bonds or the Islamic bonds and these are essentially insinuated inside the
GCC countries at the side highlighting the by and huge nature of the bonds. The veritable
legitimately authoritative guarantee additionally solidifies the buyback of the bonds insides the
long run information and the regard would be at standard. The western obligation instrument that
is standard in nature is completely around comparable as sukuk in UAE and it is fundamentally
made for meddle the returns at the side commitments interior the cash stream of the company.
Islamic law basically precludes the interested from a certain entirety of cash which ought to be
utilized interior the strategy of scattering the in common benefits of the resources. These assets
may be in a specific venture or theory activity in assention with Shariah rules and benchmarks. It
was taken after by the issuance of coasting rate Ijara Sukuk as well as pooled Sukuk by both
corporate bodies and sovereigns in a number of countries. The major degree of the grandstand of
the Sukuk is surveyed to be over 4 billion dollars creating at rate more than 90%. This gage does
not join the whole of the Malaysian household Islamic commitment issues and the Bahraini
Salam Sukuk issues. It is required to be associated with the presentation of the relationship that
produces the issuance and the deal of bonds inside the comparable kind of bonds within the
capital market.

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The market of sukuk falls inside the obligation capital market as they are highlighted with
the return from settled income sukuk holder. The investors that are related with the essential
markets buys the securities which are issues for the primary time and it is additionally imperative
for general advancement of an economy. Investment within the secondary market incorporates
the resources that are required to be related with the industry experts. It can also be seen that the
biggest components that influences the ventures primarily pushes down the issuance of the sukuk
and abating the long term development of the industry. Making the liquidity organize of the
banks fundamentally welcomes the try to address the issues that are gone up against by the
financial institutions. The company that raises spares on a very basic level issues they accept
certificates which got to be included with the subsidizing confirmation interior the GCC nations.
The Malaysia-based International Islamic Liquidity Management Corp begun endeavouring to
fill that crevice last year with issues of three-month sukuk; it directly has $1.35 billion
uncommon. The Jeddah-based Islamic Enhancement Bank focuses to issue its to start with short-
term sukuk this year. The secondary market of sukuk might require of brief term hypothesis
which are the most prominent challenges that are gone up against and these are required to be
gone up against with moment thought the foundation of the liquidity risk. As a parcel of an
Islamic capital market, sukuk gives the foremost objectives which are required to be related with
the collection of the capitals inside the Sharia. It is required to be related with the introduction of
the relationship that produces the issuance and the bargain of bonds interior the comparable kind
of bonds inside the capital market.
The market of sukuk falls interior the obligation capital promote as they are highlighted
with the return from settled pay sukuk holder. It can besides be seen that the greatest factors that
impacts the speculations essentially pushes down the yield of the sukuk and slowing the long

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term advancement of the industry. On the other hand, comparable securities offer assistance in
raising the long term capital which focuses out the development of the obligation capital markets
from the money market. Exchanging with the brief term obligation instrument are separated into
capital markets and value capital markets which focuses out the tenor of less a certain period of
time. The investors that are related with the essential markets buys the securities which are issues
for the primary time and it is additionally imperative for in general improvement of an economy.
The liquidity of Islamic fund faces a few of the issues which may be the need of resources that
are accessible within the market. Speculation within the secondary market incorporates the
resources that are required to be related with the industry experts. Making the liquidity arrange of
the banks fundamentally welcomes the try to address the issues that are gone up against by the
financial institutions. The liquidity of Islamic support faces some of the issues which may be the
availability of assets that are open inside the market. Hypothesis inside the secondary advertise
joins the assets that are required to be related with the industry specialists. It is required to be
related with the introduction of the relationship that produces the issuance and the bargain of
bonds interior the comparable kind of bonds inside the capital market. The market of sukuk falls
interior the obligation capital promote as they are highlighted with the return from settled wage
sukuk holder. It can in addition be seen that the greatest factors that impacts the speculations
essentially pushes down the yield of the sukuk and slowing the long term advancement of the
industry.
The data that are utilized for the procedure of financing or the Islamic bonds has as well
been highlighted interior the research of the sukuk. The recent study that have been compiled has
uncovered that the issuance of sukuk inside the year 2001 to 2015 has come to the sum $ 767
billion and this data is uncovered by the International Islamic Financial Market. It has moreover

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
been detailed that more than 96 % of the whole issuance of sukuk are started from the GCC
nations. It also gives a few of the secure beside quickest growing economies inside the GCC
nations which is to be spoken to by the conventional bonds and stores. There is no such lock in
period of these routine bonds as these are complied with the other kind of speculations. As
specified within the over portion that sukuk are primarily issues within the period of 2001 and
2015 which highlights around 61 % of the full sukuk. The secondary market of Islamic securities
too joins the drought of the certificates which fundamentally delivered the advantage which
ought to be returned into a rapid rate of interest. Sukuk are idealize for financing as these can be
inserted into the interested based commitment without falling the for the most part regard.
Particularly in sukuk, the pay from the advantage are settled in nature which needs the financial
pros for the predefined inside which highlights the fulfilment of reliable cash stream. It also
gives a number of the secure at the side speediest developing economies interior the GCC
countries which is to be talked to by the routine bonds and reserves. Sukuk is the instrument that
essentially serves for the elective of the routine bonds which are required to be organized for
creating the common returns for the available examiners. Other hazard such as liquidity chance
and the default chance is to be given with these dangers which some way or another clears the
sense of compliment for each other. Subsequently, the generally ubiquity of sukuk is pointed
towards the alluring speculation which is as of now developing around the world. Cost
benchmarking is additionally another type of advantage that is given by issuing of sukuk in
which the overall tradability permits to set a price within the as the marker within the secondary
market. In addition, it also develops with the skyline that allows the financial specialists for
certain approximately their general security.

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
Investments inside the GCC countries in addition basic and based on the ancient run the
show of thumb which centres out that the higher the rate of risk, the higher the rate of return. In
this way, the in common popularity of sukuk is pointed towards the engaging venture which is
right presently creating around the world. The essential instrument of the financial market is the
sukuk which centres out the exchange affiliation which are to be related with course of action of
the headway of instruments. The common instrument with the settled benefit is to be highlighted
with the financial report that might consolidate the risk of the ventures. The similarities between
the sukuk and a bond is to highlight their conceivable outcomes to sell within the secondary
market which might influence their valuation at the conclusion of the year. The credit positioning
circumstance of the bonds is primarily done by the ranking institutions which as of late created
the creator and the offerings that are advertised to them. The plausibility of turning the resources
into securities might offer assistance in their advancement which moreover centred in their
created economy. The standard financing technique in a general sense centres out the saves that
are utilized for the method of financing. It in addition considered as one kind of wagering in
earlier days but presently it has been considered as one of the first supportive way of portion.
Sukuk are idealize for financing as these can be embedded into the charmed based commitment
without falling the by and tremendous respect. The possibility of turning the resources into
securities might offer help in their progression which also centred in their created economy. In
expansion, the secondary market is for the most part given for trading with sukuk and increase its
generation with liquidation. The hazard of default is additionally related with the guarantor in
which they might not be able to form customary instalments which offer assistance in
reimbursing the guideline sum with some of the financial institutions. It moreover assesses

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
within the validity of bond clients as most of them depend on the financial specialists and rating
offices.
The Sharia compliant instrument are based on the genuine benefits which are
straightforwardly related with the basic of the fundamental of the resources and these sorts of
hazard can be decreased by as it were avoidance. The genuine issue that rises with the expected
ones incorporates the fruitful higher rate of advantage and the income is utilized for better
performance. The practical involvement within the GCC nations and in their markets also
focuses out as the obligation instrument that might unused funds for the companies. The lawful
advisors of the GCC nations have staffed that sukuk are the financial instruments which are one
kind of elective for the bonds that are accessible within the secondary markets. The issuance of
sukuk are based on the resources which includes the era of resources and dodges the pointless
issues. The portion of writing also mentioned that the sorts of sukuk and the foremost popular
type of sukuk is the Ijarah sukuk. The improvement handle of sukuk is additionally related with
the Sharia compliant obligations as they manages the complete zone for finding the in general
radical solution for the issues that might emerge within the prepare. The current transitory
arrangement is to be related with the helpful arrangement which partners with the structures that
are found in their arrangements. The Islamic financial institutions have announced that bonds of
the Gulf nations do not truly comply with the 80 % of the Islamic law which are required to be
related with the sharia compliant. Most of the basic condition basically avoids the sukuk in their
Sharia compliant which might create a few of their Riba and ensure the capital condition. The
IMF regulations are basically making harder choice for the competing with sukuk bonds which
competes with the routine bonds within the GCC nations. It too dismisses the uncommon
structures of sukuk and tallies the chance that are straightforwardly related with it. The sukuk

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
also confront the challenges inside the environment that gives benefits with the customary bonds
and affects its structure from the starting. The sukuk appraisal is additionally crucial for the
financial institutions because it includes the resources which are planning to be devalued by
measuring the potential risk.

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BENEFITS AND RISKS ASSOCIATED WITH FINANCING THROUGH ISSUANCE OF
SUKUK, MODULE FROM GCC COUNTRIES
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