MURABAHAH SUKUK STRUCTURE: THE SHARIAH CHALLENGES AND THE WAY FORWARD

  • Auwal Adam Saad International Islamic University Malaysia
  • Uzaimah Bt Ibrahim International Islamic University Malaysia
  • Muhammad Deen Mohd Napiah International Islamic University Malaysia
Keywords: Murabahah sukuk, structural development, shari’ah challenges

Abstract

Murabahah Sukuk is an Islamic trust contract which includes a disclosure of the original cost and the mark up. Murabahah in Islamic jurisprudence means a contract of sale for the equivalent price of the subject matter which includes its cost along with a known additional profit. The paper discusses issues related to Murabahah Sukuk financing. It also provides the structural overview of Murabahah in terms of Sukuk issuances. The paper highlighted three different ways of structuring Murabahah Sukuk, it looks into the structure of Murabahah for asset acquisition, Murabahah with Inah transaction and lastly Murabahah with tawarruq transaction. The paper concluded that according to the general rules of Shari’ah, Murabahah Sukuk should not be traded at secondary market due to the fact that it involved the sale of debt which is forbidden. However, Murabahah Sukuk might be negotiated at the secondary market if it forms a small part of a larger portfolio comprising other negotiable instruments such as Ijarah Sukuk, Musharakah, and Mudarabah Sukuk certificates.

Author Biographies

Auwal Adam Saad, International Islamic University Malaysia
Ahmad Ibrahim Kulliyyah of Laws, IIUM
Uzaimah Bt Ibrahim, International Islamic University Malaysia
Ahmad Ibrahim Kulliyyah of Laws
Muhammad Deen Mohd Napiah, International Islamic University Malaysia
International Islamic University Malaysia

References

Abdulqadir Thomas (2009). Sukuk Islamic Capital Market Series, Malaysia: Sweet & Maxwell Asia Bandar Sunway Selangor.

Imam Alauddin Abubakr bin Mas’ud Al-Kasani Alhanafi. (2005). Badai’ al-sana’ fi Tartib al-Sharaa’i. Darul Hadith Al-Qahirah, Egypt.

Imam Al-Sarkhasi. (2001). Kitab Al-mabsut. Darul Kutub al-‘Ilmiyyah Beirut Lebanon.

Malaysian Sukuk Market Handbook. (2009). Your guide to the Malaysian Islamic Capital Market. Ram Ratings Services Berhad

Mohammad Hashim kamali (1990) “Islamic Commercial Law: An analysis of futures and options” Islamic Text Society.

M.A Mannan (1993). Understanding Islamic Finance: A study of the Securities Market in an Islamic framework, by Islamic Research and Training Institute Islamic Development Bank Jeddah.

Principles and practices of Shari’ah in Islamic Finance, Shari’ah Advisory Council of Bank Negara Malaysia Section 3 No.8 p.4

Shari’ah Standards for Financial Institutions (2008). Published by the Accounting and Auditing Organization for Islamic Financial Institutions.

Resolution of the Securities Commission Shari’ah advisory council Malaysia, second edition 2007

Published
2016-04-29