Sukuk Issuance Research Articles

ANALISIS FAKTOR YANG MEMPENGARUHI TINGKAT SEWA SUKUK IJARAH STUDI KASUS PADA PERUSAHAAN YANG MENERBITKAN SUKUK IJARAH DI BURSA EFEK INDONESIA TAHUN 2015-2020

This study aims to determine whether Gross Domestic Product, Company Size, Bond Maturity, Debt to Equity Ratio (DER) affect the Sukuk Ijarah Rental Rate (Case Study on Companies Issuing Sukuk Ijarah In Indonesia Stock Exchange 2015-2020). The sample used in this study were 5 companies with the analytical method used, namely Quantitative Analysis. The results showed partially the variables Gross Domestic Product, Company Size, and Debt to Equity Ratio (DER) had no significant effect on the rental rate of Sukuk Ijarah and simultaneously Bond Maturity has a significant effect on the Rental Rate of Sukuk Ijarah.

Smart Sukuk Issuance Platforms based on Blockchain Technology to Finance Small and Medium Enterprises in the Kingdom of Saudi Arabia: Opportunities and Challenges

Smart Sukuk Issuance Platforms based on Blockchain Technology to Finance Small and Medium Enterprises in the Kingdom of Saudi Arabia: Opportunities and Challenges

3.1 BILLION PKR PAKISTAN MORTGAGE REFINANCE COMPANY SUKUK: A FIRST OF ITS KIND FOR HOUSING FINANCE

The following presents a case study pertaining to innovation in the Sukuk industry in the Islamic capital market of Pakistan which has gained momentum over the last five years. The purpose of this case is to describe a recent Sukuk issued by Pakistan Mortgage Refinance Company (PMRC), a Mortgage Liquidity facility that issued Musharka Sukuk based on Shirkat-ul Aqd, aimed at developing housing finance market in Pakistan. Given the acute shortage of houses and reluctance amongst banks to grant consumers housing loans for a longer-term duration, this facility will enable affordable house financing through a Shariah-compliant mode, while offering a new avenue of investment for capital market participants. This paper describes the key features of the Sukuk, outlines its Shariah structure, and elaborates upon the mechanism of the transaction. A graphical illustration of the Sukuk structure is made to facilitate the reader’s understanding of each step of the transaction. The PKR 3.1billion PMRC Sukuk with the fixed-rate offering of 8.25% for 3 years is expected to be a landmark for the development of the housing sector of the country. It supplements the idea of how the issuance of Sukuk can play a vital role in addressing real economic needs.

Analisis Penerbitan Sukuk Negara Ritel Seri-015 tahun 2021

In the world of Indonesian state finance, there are many types and varieties of financial products in circulation. As a society with the 4th largest population in the world, Indonesia is a very lucrative market share. This is often the main discussion in international organizations where Indonesia as a developing country is heading to a developed country. One product that is in great demand from year to year is retail sukuk. There are 15 Retail Sukuk products called Retail Sukuk 015. The products offered by the Indonesian government are very profitable on a certain scale. Where Retail Sukuk (retail sukuk) are a Sharia investment product offered by the government to individual Indonesian citizens. The management presented by Retail Sukuk must be based on Sharia principles, avoiding the elements of maysir (gambling), gharar (obscurity) and no usury (usury). The concept offered has also received a guarantee from the DSN MUI so that the contract used to issue Retail Sukuk is Ijarah-Asset to be leased. The existing capital turnover was developed for investment activities to purchase benefit rights to State Property leased by the government to procurement projects (project businesses). So the rewards are clearly taken or shared from the profits from the investment activities. To add to the clarity of how these benefits are obtained, it is described through 8 (eight) investment benefits issued by the Ministry of Finance as an extension of the Indonesian government. Therefore, the Government has a definite goal where the issuance of retail sukuk is to help finance the APBN and finance the development of various infrastructures in Indonesia.
 Keywords: Retail Sukuk, Sharia, Investment

Constraints and strategies for municipal Sukuk issuance in Indonesia

PurposeThis study aims to examine the constraints in the issuance of municipal Sukuk in Indonesia and proposed potential solutions and strategies to support its implementation.Design/methodology/approachThis study used the analytic network process (ANP) method with four groups of relevant respondents that comprised representatives from the local government, universities (academicians), experts (practitioners) and regulators.FindingsFour elements support municipal Sukuk issuance: issuer (regional government or municipality), investor, market and infrastructure. The element with the highest score was the lack of commitment from the regional government in issuing municipal sukuk due to leadership change that occurs every five years. Thus, specific regulations that strengthen and regulate municipal Sukuk issuance and the support from the central government are the priority solutions and strategies that should be undertaken to encourage regional governments in issuing municipal Sukuk.Practical implicationsThe establishment of specific regulations by the central government that support and strengthen municipal Sukuk issuance is necessary to promote successful implementation. Supports from the central government include tax incentives, accessible licensing processes and bureaucracy aids.Originality/valueThis study extended the literature by examining problems, solutions and strategies for municipal Sukuk issuance in terms of four aspects: the issuer (municipal government), investors, markets and infrastructure. The multiple aspect analyses provided a broader understanding of the lack of municipal Sukuk issuance in Indonesia.

Stock Market Reactions on Shariah Indices Following Sukuk Issuances: CAAR Analysis on 2008-Financial Crisis

The purpose of this study is to look at how stock markets in Malaysia reacted to sukuk issuance announcements from 2004 to the post-2008 financial crisis by examining 50 selected companies listed in The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI), FTSE Bursa Malaysia Emas Shari’ah Index (FBM EMAS), FTSE Bursa Malaysia Hijrah Shari’ah Index (FBM HIJRAH), and Dow Jones Islamic Market Index (DJIM). The data gathered from Datastream, Bloomberg, the Securities Commission Malaysia, and the Bursa Malaysia stock exchange were used to compile this study. A three-year estimation period to investigate market reactions using cumulative average abnormal return (CAAR) was adopted in this study. To investigate market efficiency, this study looked at symmetric and asymmetric event windows. This study discovers that markets responded favourably before the crisis but negatively and significantly during and after the crisis. The findings of this study provide advice to policymakers on how to direct regulators, investors, and issuers to the most stable sukuk during a crisis, as well as useful information and suggestions to issuers, policymakers, regulatory organisations, and investors in Islamic bonds.

Cash Waqf Linked Sukuk (CWLS) di tengah Pandemi Covid-19 dan Implementasinya Terhadap Ketahanan Ekonomi

This study aims to determine how the Cash Waqf Linked Sukuk or CWLS program is in the midst of the Covid-19 pandemic and its implications for economic resilience. The system pioneered and implemented by the Indonesian Waqf Board or BWI is an interesting matter to study. In addition, based on the analysis of the CWLS research VOSViewer software, not many have researched it. Researchers use policy making theory which is used as a research point of view. This research is a descriptive qualitative research. The results of this study indicate that the CWLS waqf system is a form of social investment in Indonesia. The Indonesian Waqf Board acts as an accelerator. The subject of this system is the cash waqf itself collected by BWI as the manager of Indonesian waqf or Nazhir through BNI Syariah and Bank Muamalat Indonesia as Islamic Financial Institutions Receiving Cash Waqf or LKSPWU. Then the cash waqf will later be managed and placed in the State Sukuk Instrument or State Sharia Securities (SBSN) issued by the Ministry of Finance (Kemenkeu). CWLS itself also implements economic resilience. It can be seen on the BWI website on Cash Waqf Linked Sukuk (CWLS) that the government will use the results of the issuance of this State Sukuk to finance the state budget, including to finance the development of public service projects such as the development of educational infrastructure and religious services

Financial Accountability and Religious Sentiments: The Case of Sukuk Bond

This study bridged the gap in the literature by exploring the overlaps between public financial accountability and religious sentiments. Previous studies have considered accountability in specific religions and religious organisations through the expositions of their application of accounting concepts and procedures. However, the ways in which religious sentiments affect public accountability are rarely researched. Yet, religion and religious sentiments play central roles in the lived experiences of many people and affect their decisions and perceptions. We used the issuance of Sukuk as a way to understanding how religious sentiments can impact public financial accountability. Our analysis of the online commentaries on the media report of the Sukuk issuance relied on the theory of Symbolic Interactionism and an interpretivist research approach that recognises multiple realities and supports exploring people’s lived experiences. Symbolic Interactionism suggests that people create meanings from their interactions with others through symbols, actions and multiple roles in social settings. Our findings showed that the Sukuk issuance elicited conflicting symbolic meanings amongst Netizens that affected their opinions of governments’ efforts to enhance public infrastructure using alternative financing options. We argued that clarity on the intersection between religious sentiment and public financial accountability can lead to deeper understanding on the nature of public accountability. It could also support the design of appropriate accountability frameworks especially in contexts with social fissures capable of undermining public accountability.

Determinants of Sukuk Issuers’ Financial Stability: Evidence from Malaysia

Financial stability and Sukuk expanded swiftly into the financial industry after the 2007-2008 global financial turmoil. Malaysia's Sukuk market is arguably the most prominent in Islamic finance globally, and its inherent nature gives it a better security on the premise of guaranteed firms’ financial stability and returns to investors. This study aims to explore the extent of the Malaysian firms’ financial stability are being influenced by the characteristics of Sukuk and also the firms’ characteristics. Sixty-one listed companies that have issued Sukuk from 1997 to 2017 have been selected for this study. The nave distance to default (DD) developed by Bharath and Shumway was used as a measure of the firms’ financial stability. Ordinary Least Squares (OLS) was employed in this study, and the results confirmed that Sukuk could promote the firms’ financial stability. The variables related to the characteristics of Sukuk that were found to influence financial stability were the intensity of Sukuk and the proportion of Sukuk financing. The firm size, valuation, solvency, and profitability were the firms’ characteristics that have also affected the firms’ financial stability significantly. All these provide evidences that Malaysia should play more active role in promoting the development of Sukuk market, and at the same time should be aware that financial stability is a systematic element which involved many complex factors.

Determinan Peringkat Sukuk Korporasi Pada Pasar Modal di Indonesia Tahun 2014-2020

This study aims to determine and provide empirical findings whether profitability, liquidity, leverage, productivity, firm size, and age of sukuk have an influence on sukuk ratings. The sample used is companies that issue sukuk and are listed on the Indonesia Stock Exchange. The data analysis technique uses multiple linear regression analysis with the help of SPSS 23. The results of this study indicate that the firm size and age of the sukuk have an effect on the sukuk rating. Meanwhile, profitability, liquidity, leverage, and productivity have no effect on the sukuk rating.

Eksistensi Obligasi Syariah (Sukuk) Korporasi di Indonesia pada Masa Pandemi

This article explained how the existence of corporate sharia bonds (Sukuk) during the pandemic. Sukuk was one of the instruments owned by Islamic financial institutions, namely the Islamic capital market. The existence of the coronavirus had existed for one year. By using the library research method, and using qualitative descriptive, namely the method by describing and interpreting the existence of Islamic bonds (Sukuk) in the pandemic period qualitatively, namely the description and description in words based on library data, journal articles, OJK and related data. The data collection method used the documentation method then the data was processed so that it completes this article. The results showed that the record was the outstanding value of Sukuk from 2016 to January 2021 had increased from 11.88 trillion to 30.25 trillion. Meanwhile, the number of outstanding Sukuk had experienced a good development from 2016-January 2021, namely from 53 to 161. And the accumulated value of Sukuk issuance had also increased, from 2016-January 2021 from 20.43 trillion to 55.15 trillion. Meanwhile, the accumulated number of Sukuk issuances also increased from 102 to 274.

Analysis Of Factors On The Issuance Of Sharia Bonds (Sukuk) And Sharia Shares On Company Performance In Jakarta Islamic Index 70

This study aims to analyze the effect of the issuance of Islamic bonds (sukuk) and the issuance of Islamic stocks on company performance in the Jakarta Islamic Index 70. The issuance of Islamic bonds and Islamic stocks is an alternative for companies to obtain a capital structure in carrying out company operations and is expected to improve the company's performance. In terms of financial performance through Return On Assets (ROA), company stakeholders optimize Islamic capital market products to increase Islamic financial inclusion. Besides, it attracts investors to invest. This study uses a quantitative descriptive method, secondary data from companies listed in the Jakarta Islamic Index 70 years 2018-2020 using a purposive sampling method with Tobin's analysis and company age into 15 samples. Testing the hypothesis model using the classic assumption test and multiple regression tests to test the market reaction to the issuance of Sukuk and Islamic shares on the issuance variable using the issuance value, the number of shares outstanding, company leverage, company size, total debt, and company managerial ownership. The research resultsstated thatReturn on Assets (ROA) was affected bythe issuance value variable and the company's leverage in 0.00192 and 0.0373. The variables of the number of outstanding shares, total debt, firm size, and managerial ownership do not affect the value of ROA. However, all variables have a significant effect on the ROA value. The result shows that the issuance of Islamic bonds and Islamic stocks affects the company's performance.

Does Islamic Bonds (Sukuk) Market Development Discourage Islamic Debt Growth?

The aim of this study is to forecast the sukuk market development influences on Islamic debt in largest Islamic stock markets in GCC countries (KSA and UAE). This Study apply time series analysis technic to estimate long run auto regressive distributed lag model (ARDL). The data covers from Q2-2000 to Q4-2020 for 31 quarterly observations, therefore, the results show a negative significant impact of sukuk Income on Islamic Debt in both counties, while Sukuk Investment development has negative insignificant effect in KSA and negative significant impact in UAE. In addition, Sukuk Financing Payables development proxies indicate positive insignificant impact on rung run Islamic debt in both selected countries, this leads to the theory that Islamic Bonds (Sukuk) is entirely different from traditional bonds regarding their characteristics and economic role. Furthermore, the study provides empirical evidence for investors and policymakers that companies may issue Sukuk rather than traditional bonds when issuance of more outstanding debt and longer tenor is needed.

SUKUK AND BONDS IN INDONESIA: AN OVERVIEW

From the early 1920s to the late 20th century, there were at least 25 financial crises globally. In 2018, the Global Islamic Finance Report reported that Indonesia has tremendous potential to develop Islamic finance. Some of the Islamic financial products that can be developed in Indonesia are bonds and sukuk. Bonds are a product of the capital market. In its development, bonds have undergone relatively rapid innovation, which provides room for issuing Islamic bonds known as sukuk. This paper discusses the difference between sukuk and bonds. This paper aims to look at the differences between sukuk and bonds and the opportunities for issuance, application, and development of sukuk in Indonesia. This research is qualitative research that is literature. As for obtaining comprehensive results, this study uses two approaches consisting of a socio-historical approach and content analysis. The analysis results show that sukuk are in principle the same as bonds, with the main differences, among others, in the use of the concept of return and profit-sharing as a substitute for interest. Keywords: Sukuk; Bond; Sharia Bonds; Capital market; Indonesia

The role of financial factors and non-financial factors on corporate bond and sukuk rating Indonesia

PurposeThis study aims to analyze the determinants of ratings of corporate bonds and sukuk issued by firms listed on the Indonesia Stock Exchange (IDX) for the 2013–2019 period.Design/methodology/approachThis study uses a quantitative approach by testing hypotheses and using logistic regression. Ordinal logistic endogenous (or dependent) variables (Y) in ordinal logistics use data in the form of levels (ordinal scale). Independent (or exogenous) variables (X), include financial and non-financial factors for dependent (or endogenous) variables (Y), namely, of corporate bonds and sukuk ratings. There are two approaches to the study they are Logit and Gompit (Negative Log-Log. The population of the study is Indonesian companies listed on the IDX that issued bonds and sukuk for the 2013–2019 periods. The sampling technique is purposive. In total, 16 corporate companies adhering to the above criteria and issuing bonds and sukuk were chosen. In total, 270 types of bonds and 280 types of sukuk were selected as samples.FindingsThe results of the Logit and Gompit regression show that leverage ratio, firm size, security structure and maturity date are important determinants of corporate bond ratings while profitability and liquidity ratios appear to have no influence on the rating. In the case of sukuk, profitability, liquidity and maturity date play important roles in influencing the corporate sukuk rating. However, there is no evidence to suggest that leverage ratio, company size and security structure may affect sukuk ratings.Research limitations/implicationsFor both sukuk and bond issuers, it is necessary to pay attention to the factors that may affect the ratings. Specifically, Sukuk issuers need to pay attention to the return of asset, current ratio, growth and structure. On the other hand, bond issuers need to consider depth to equity, structure and maturity. As for investors, the findings of this study reveal that both bond and sukuk ratings reflect their performance.Practical implicationsThis study provides useful information for investors that allows them to assess the risk of sukuk or bonds chosen based on rating and financial performance.Originality/valueThe novelty of this study lies in its econometric methodology used to identify factors which influence sukuk and bond ratings. Specifically, this study used two different techniques that allow a robust conclusion to be drawn. Furthermore, this study provides a systematic analysis which allows comparison between factors which affect bond and sukuk ratings in Indonesia.

Analisis Faktor yang Mempengaruhi Rating Sukuk Syariah di Indonesia

Abstract: Sukuk is a form of investment and a means for companies to seek capital. Sukuk's issuance growth-increasing indicates that many investors are interested in buying Sukuk, so that many companies are also interested in issuing Sukuk. The more Sukuk issuances, the more important the rating of the Sukuk for investors and companies will issue Sukuk. The research aims to analyze the factors that affect the rating of Sukuk, such as corporate governance, financial ratios, market value, secure and types of Sukuk. The next goal is that the results of this study are expected to be a consideration for investors in determining investment in Sukuk and for companies to be considered in issuing Sukuk. This study uses secondary data obtained from the annual reports of corporate companies listed on the Indonesia Stock Exchange and rated by PT PEFINDO. The analysis technique in this study uses multinomial logistic regression with the SPSS 25. tool. The result of this study indicates that the CEO-Chairman Duality variable has a significant value of 0.037, the number of commissioners has a significant value of 0.001, commissioner independence is significant 0.035. Profitability has a significant value of 0.008, and leverage has a significant value of 0.044, liquidity has a significant value of 0.000. Market value using the stock price variable has a significant value of 0.006. The Secure variable has a significant value of 0.012. The type of Sukuk has a significant value of 0.000, so all variables in this study are considered to affect the Sukuk rating.

“PENGARUH PENERBITAN SUKUK TERHADAP KINERJA KEUANGAN BANK UMUM SYARIAH DI INDONESIA”

The Effect of Sukuk Issuance on the Financial Performance of Islamic Banking in Indonesia by using the Return On Asset (ROA) ratio to measure the profit of a company from the return on assets and return on equity as measured by Return On Equity (ROE). This study uses a linear regression analysis method where the dependent variables are ROA and ROE, and the independent variable is the issuance of sukuk. The results show that the issuance of sukuk does not have a significant effect on the Return On Assets (ROA) of Islamic commercial banks registered with the OJK. but the issuance of sukuk has a significant effect on the company's Return On Equity (ROE). Islamic general banking that is registered with the Financial Services Authority”.

Sukuk on Blockchain: Application, Advantages, and Challenges

This paper aims to identify key insights from the available literature review on blockchain in the sukuk market and provide a commentary of its prospects specifically in its application within the sukuk market advantages and challenges. The paper primarily applies a qualitative approach and literature review as a research method. The result showed that smart sukuk has the potential of becoming the future for sukuk issuances and may contribute to the spread of sukuk more widely, leading to the expansion of Islamic funding. The advantages of smart contracts could facilitate transactions in convenient way and hence would contribute to wellbeing of the ummah, thus achieving the maslaha. The use of smart contracts designed to protect against fraud is also consistent with maqasid al-Shariah (purposes of Shariah), which is the protection of al-mal (property).

Green sukuk – Malaysia surviving the bumpy road: performance, challenges and reconciled issuance framework

PurposeGreen sukuk is a tool to finance climate change which has garnered considerable attention. However, having only recently come into existence has its own set of challenges for this tool that require immediate identification and government intervention to intensify its growth. This study aims to explore the challenges encountered by green sukuk issuers and the structure of a reconciled green sukuk issuance framework to speed up the market’s growth with the right interventions.Design/methodology/approachThe study engaged a qualitative approach via multiple case study interviews with green sukuk issuers and used expert views for data triangulation to generate the findings. A total of four green sukuk issuers participated in the interviews, and for data triangulation purposes, four expert’s opinions and views were considered. The thematic analysis technique is used to report the findings.FindingsIt was revealed that amongst the challenges encountered in the green sukuk market are shoddy green taxonomy, difficulty in identifying green assets, it is time-consuming and costly, no compelling benefits and exposure to higher-risk profiles.Research limitations/implicationsThis study may be influenced by observer error and observer bias. However, the researchers have taken cautious steps to overcome these issues by following strict case study methodology procedures and triangulating the qualitative research findings with views from green sukuk experts. These interventions increased the rigour and trustworthiness of the results.Originality/valueThis study is amongst the pioneer in Malaysia, exploring challenges in the green sukuk market. The results are relevant to governments, regulators, institutions and central banks to structure the right interventions to counter the challenges. Greater government involvement is required to strengthen the green sukuk market and to spearhead the green agenda.

Opportunities and Challenges of Retail Sovereign Sukuk Issuance: Lessons from Twelve Years’ Experience

Retail sukuk is a sharia product offered to Indonesian citizens as a safe and profitable investment instrument. This study identified the strengths, weaknesses, opportunities, and threats that the government may face in offering retail sovereign sukuk. It aimed to provide the government the appropriate strategies based on the historical data of listed retail sukuk and its peripherals during 2009-2020. This paper used a qualitative research approach. The data collection techniques used were literature review and in-depth interview. Internal and external factors were identified. SWOT matrix was made prior to analysis. The results show that the coupon rate offered by retail sovereign sukuk is mostly higher than BI rate. Market expansion is needed. The government shall optimize all distribution partners. Newly innovated products should be developed. Certain criteria should be formulated to determine coupon rate. This research suggests that an independent Special Purpose Vehicle should be reconstructed as a separate entity.JEL Classification: E62, G23, G28, H63How to Cite:Muchtar, M. (2021). Opportunities and Challenges of Retail Sovereign Sukuk Issuance: Lessons from Twelve Years’ Experience. Signifikan: Jurnal Ilmu Ekonomi, 10(2), 259-274. https://doi.org/10.15408/sjie.v10i2.20093.