Abstract
The Malaysia enjoys the monetary and non-monetary benefits for being the sukuk hub for globe. Malaysian market has already suffered much from defaults. To save them from future defaults the periodic update must be taken for the closeness of defaults. This study calculated distance to default (DD) for 231 observations for the time period of 2011-2017 in the post-crisis era. It was noted that the sukuk issuers are although diverse in their credit profiles, on the aggregate most of them are having strong level of assets to absorb their liability pay-offs. The DD values were at highest level for logistics, industrial goods, manufacturing, real estate and construction and lowest in energy sector. Directions for future research were also discussed in concluding part of this paper.
Highlights
It is reported by the esteemed institute of IMF that Islamic finance has emerged as a strong reality and the part of the financial markets, especially after it has shown a noteworthy resilience against the crisis
The lowest level of distance to default (DD) was associated with the sectors of construction and energy
The firms with heavy portion of account receivables in their financials can be at higher level of the credit risk (Kim, Cho, & Ryu, 2019)
Summary
The report adds that the rapid growth in Islamic finance was made possible due to the instruments of sukuk. Sukuk has rightfully added economic efficiency and liquidity in the market. It is import element of Islamic financial industry due to its size. 95% of assets in Islamic financial industry are held by Islamic banks and sukuk issuers (IMF, 2015). After the 2015 the sukuk market has entered in the “consolidation phase”. The market under this phase is face different kind of challenges that are pressing the issuances negatively The sukuk defaults in past have given a negative impact on the market
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Academic Research in Business and Social Sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
