Abstract

Sukuk are a significant mode of financing in the Islamic financial system. Since their launch in the 1980s, Sukuk have gained recognition and popularity as a substitute for conventional bonds. Sukuk represent a proportional undivided ownership right in tangible assets, or a pool of predominantly tangible assets. The aim of this study to identify a number of factors that can be used to demonstrate the relationships between bond yields by employing OLS regression analysis. The results from the regression analysis suggested that maturity, size, Ijara, sovereign Sukuk, and credit rating have significant results on Sukuk yield. The findings of this study could be helpful for investors to get better risk-adjusted returns in bonds markets. For policy makers, it highlights the importance of further developments in Sukuk markets.

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