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We empirically investigate the determinants of sukuk issuance type in Indonesia to issue either ijarah sukuk or mudharabah sukuk. We include sukuk characteristics, sharia-related factors, and firm characteristics, provide empirical evidence on the determinants of sukuk issuance type by incorporating sukuk-specific factors, firm-specific factors, and sharia compliance variables, and address the role of Sharia Supervisory Board, as the sharia representative of firm compliance for sharia products, in the issuer’s choice of sukuk type. By studying 88 sukuk issuance in Indonesia from 2009 to 2017, we find that firm profitability and the sharia compliance level have a significant effect on the probability of issuing mudharabah sukuk. Some other factors’ characteristics including sukuk yield, firm age, and inflation rate are also found to have a significant effect.

This research aims to explore the role played by Ijara-Murabaha Sukuk in attracting foreign direct investment (FDI) that adheres to Shariah principles into Pakistan’s oil sector. It focuses on the difficulties faced by the country in terms of payment for oil procurement. It highlights the recent collaboration with ARAMCO, Saudi Arabia’s national oil company, to establish the Gwadar Refinery Project. This project aims to enhance oil production, reduce costs and increase storage capacity.

Data was collected from 379 investors who participate in Ijara-Murabaha Sukuk through a questionnaire designed to evaluate how trade finance solutions, sustainability practices, transparency measures and governance structures impact FDI that comply with Shariah principles. The study also considers the moderating role of market conditions on these factors. Smart PLS 4 software was used to analyze their influence on creating an environment conducive to Shariah-compliant FDI.

The findings reveal that if the company prioritizes shariah-compliant foreign direct investment over conventional due to underlying productive activities ensuring economic growth as well as strong compliance mechanisms ensuring transparency, the multifaceted challenges associated with oil procurement, circular deficit, foreign exchange reserves and transparency problems can be solved. The groundbreaking analysis from this study will guide the major stakeholders while developing policies to convert the most expensive and massive budget deficit sector into a contributing sector of the economy.

This is a pioneering study on the application of Ijara-Murabaha Sukuk to resolve the problem of circular deficit of oil sectors of Pakistan by issuing 51% Ijara Sukuk for enhancing the capacity for the storage of oil and producing the oil from imported crude oil. 49% murabaha sukuk for importing crude oil. Successful implementation of the Shariah-compliant ARAMCO project can open the door to foreign direct investment for Pakistan and the other third economies, meeting the “Reducing Poverty of SDGs.”

This study aims to determine the factors that influence investors’ behavioral intentions in investing in green retail sukuk through the constructs offered by the extended pro-environmental planned behavior (PEPB) theory and adding several other constructs such as perceived benefit (PB), perceived risk (PR) and religious value (RV).

Non-probability sampling was used to collect data from 460 Muslims living on Java who had invested in green sukuk retail and had a basic understanding of it as an alternative Islamic investment instrument. PLS-SEM was used to test the data with SmartPLS 3.0.

Perceived authority support (PAS) and perceived environmental concern (PEC) positively and significantly affect attitude (AT), subjective norm (SN) and perceived behavioral control (PBC). This study also shows that SN, PBC, PB, PR and RV boost INT significantly. AT has a positive but insignificant effect.

This study has limitations from the demographic aspect of respondents who only accommodate respondents who are Muslim and live in Java Island.

This research suggests ways to socialize green sukuk investment to the public as potential investors by describing environmental benefits and how retail green sukuk can benefit investors and the environment. Competent parties who understand Islamic finance, and muamalah contracts can socialize beginner voters who do not understand the risks and rewards of green sukuk investments.

This research suggests ways to socialize green sukuk investment to the public as potential investors by describing environmental benefits and how retail green sukuk can benefit investors and the environment.

This study introduces environmental-based constructs PAS and PEC, which are infrequently used in research models that measure the intention to invest in green investment instruments like green sukuk. Additional constructions like PB, PR and RV enhance research results.

This paper provides a critical assessment of Indonesia’s pioneering initiative in issuing cash waqf-linked sukuk (CWLS), a hybrid government sukuk integrated with Islamic endowment funds (waqf). Focused on addressing urgent health-care and essential expenditures, this study aims to evaluate the features and performance of CWLS sales.

Using a literature review and in-depth interviews, this study comprehensively analyzes CWLS from multiple perspectives.

The research indicates that CWLS effectively mobilizes public funds, benefiting the government by supporting essential needs and enhancing waqf management in Indonesia. Moreover, it significantly improves the quality of life through social projects financed by CWLS returns.

The study offers actionable recommendations for enhancing CWLS performance in Indonesia and serves as a suggestion for other governments considering similar financial instruments.

As a socially oriented financial tool, CWLS emerges as a pivotal strategy for enhancing national waqf management and promoting equitable wealth distribution.

This study represents the first critical assessment of CWLS in Indonesia, advancing theory by integrating Islamic finance principles with governmental fiscal policies through innovative sukuk structures. It contributes to the distributive justice theory by demonstrating how CWLS operationalizes fairness and equity in resource allocation.

Despite the growing prevalence of Sukuk issuances, there remains a significant knowledge gap concerning their specific risk exposures to originators of issuances rather than to investors, particularly compared to conventional bonds, and the implications of this for the corporate governance (CG) of originators. This study aims to examine the risks faced by originators and sponsors of Sukuk issuances, drawing insights from unique Sukuk case studies. The distinct characteristics of Sukuk include legal intricacies and Shari’ah compliance, which pose particular challenges to originators. Effective risk management is a key issue for CG in these areas.

A sequential explanatory case study method is employed, utilising the content analysis approach to extract information from various articles, reports and Sukuk case studies, including Tamweel Residential Mortgage Backed Sukuk and Tamweel Sukuk Limited.

The findings underscore the critical issues for originators in navigating risks within Sukuk structures, particularly concerning Shari’ah non-compliance and default risk. This highlights the importance of managing risks inherent in Sukuk structures, considering both Shari’ah compliance obligations and the sustainability of Sukuk in terms of default risk. Default scenarios raise unique questions regarding stakeholders' interests, specifically those of shareholders, investors and creditors, contingent on the Sukuk issuance's structure and contractual basis of the Sukuk issuance.

The need for a CG framework conducive to the effective management of these risks, thereby ensuring both Shari’ah compliance and long-term viability, which is crucial for the sustainable growth of Sukuk in the financial landscape.

This study offers a unique perspective by focusing on the risks faced by originators of Sukuk issuances, a largely unexplored area, and underscores the importance of effective risk management for CG and sustainability of Sukuk issuances.

I study the determinants of conventional leverage in a sample of publicly listed corporations based in Saudi Arabia, United Arab Emirates, and Qatar, for a period spanning from 2005 up to end of 2014, and investigate whether those determinants can also explain the utilization of Sukuk by the same corporations in their capital structures. Evidence related to the determinants of conventional leverage is consistent with results from prior studies conducted on corporations based in developed and developing countries. Firm’s size, profitability, tangibility, age, and tendency to pay dividends are significant determinants of conventional leverage. However, not all those factors significantly explain the utilization of Sukuk as a financing vehicle. The size of the firm remains to be the most significant factor, in addition to the conformance of those corporations with respect to Shari’a principles measured by their utilization of other Islamic investments and financing instruments. Overall, I conclude that models used to predict conventional leverage are not capable of fully explaining the determinants of Sukuk issuances.

COVID-19 pandemic was a health crisis that plunged the world into economic turmoil due to its resultant national lockdowns across economies which brought business and market activities to a standstill. In order to adapt to ensuing restrictions owing to the pandemic, forge ahead in a new way of living, work and interactions with one another (new normal), digitizing business and market operations is considered a necessary option. Sukuk is an essential Islamic capital market product whose operations involve multiple parties/intermediaries alongside some technical financial, administrative and legal/shariah processes. On this note, this chapter aims to study and examine the need for digitizing and automating sukuk operations and related activities to pave way for innovation, development and better continuity of sukuk market. In conducting the study, a review of literature approach is employed where relevant works on sukuk and fintech were examined. Using content analysis, the chapter explored digitization of sukuk in the Islamic capital market via fintech and blockchain and associated benefits, including peculiar challenges therein. An interview was also conducted to better understand the Wethaq case study. The chapter reveals that digitizing sukuk issuance adds value to sukuk and remedies certain inadequacies associated with sukuk transactions; can increase transparency of underlying sukuk assets and cash flows and can reduce costs due to lesser number of intermediaries. Digitization is the future of sukuk issuance and will promote sukuk well through the COVID-19 crisis and beyond.

Sukuk restructuring primarily aims at offering a debtor more latitude, in form and time, to settle his obligations. To meet Shari’ah requirements of transferring assets to Sukuk holders in asset-based Sukuk, the originator usually transfers the beneficial ownership to the issuer special purpose vehicles (SPV). However, in asset-backed Sukuk, the originator sells the underlying asset to an SPV and Sukuk holders do not have recourse to the originator in the event of defaults. Among some key unresolved Shari’ah issues in this regard is whether a change of contract necessitates entering a new contract. Other related issues that conflict with the tenets of Shari’ah are: (1) Sukuk structuring on tangible assets and debts; (2) receiving the full title by the Sukuk holders to the underlying assets in the event of default in case of securities that are publicized as asset backed; (3) Sukuk’s similarity with interest bearing conventional bonds: (a) capital guarantee by the originator or third party, (b) the originators’ promise to repurchase Sukuk at face value upon their redemption, and (c) providing internal and external credit enhancement. The Shari’ah-compliance of the above-mentioned clauses and structures of Sukuk remain debated among the Shari’ah scholars. Based on some specific cases, this study examines the Shari’ah viewpoint on sukuk restructuring and potential solutions to these unresolved Shari’ah issues in light of the past and recent declaration of some Sukuk defaults as non-Shari’ah complaints. Undoubtedly, resolution of these and other unresolved issues pertaining to Sukuk defaults can help strengthen the confidence of investors in Islamic capital market structures.

Islamic endowment (awqaf), particularly awqaf land, is one of the potential Islamic social assets to serve the public interest, particularly to provide public infrastructures such as business centers, public hospitals and airports. However, unfortunately, most of them are still unproductive lands, especially in the form of idle lands. One problem to use such unproductive awqaf lands is the lack of awqaf land model as the platform to use such awqaf lands. This paper aims to construct and propose a model called Sukuk-linked Awqaf (SLA) to use awqaf lands as an underlying for Sukuk issuance.

This paper constructs mechanisms and formulas of SLA by involving Sukuk issuer, awqaf management (Nadzhir), Sukuk investors and tenants of the infrastructure. In particular, the SLA model is proposed based on the unique characteristics of both awqaf asset and Ijarah (leasing) Sukuk, considers the intention of state-owned enterprise (SOE) to construct buildings to be rented to the tenant and to be owned by the awqaf manager and formulates equations and uses net present value theory to determine Nadzhir and Sukuk investors’ investment decisions.

Engaging awqaf land with SLA model can ease its benefit for the society. The model addresses the strategic roles of Nadzhir, SOE, investors and contractor in using awqaf land.

The SLA model could ease related parties to use the awqaf land for the sake of public benefits.

To the best of the author’s knowledge, this is the first assessment on the potential implementation of Islamic hedging with a commodity as an alternative hedging in Indonesia.