LIFE-CYCLE HYPOTHESIS OF HYBRID SUKUK

Luthvia Moonda

Abstract


The development of financial system recently has been contributing to the economic growth of the nation. Its vital role helps many financial institutions to advance their financial services, particularly in investment systems such as Sukuk. As seen in recent years, the involvement of Sukuk in many industries ranging from sovereigns to corporates for both Muslim and non-Muslim world companies. Although its popularity increases, it seems to be widely accepted that the insufficient structures of Sukuk become a big challenge to serve the public needs to be in compliance with Shari’ah principles. In an attempt to fulfil many financial companies in issuing Sukuk and the needs of the Muslim world, this study aims to provide the new structure of Sukuk. The study proposes a design of securitization by combining two contracts of Sukuk into one Sukuk structure. The constructed idea will use a model of life cycle hypothesis to support the Sukuk issuing companies in maintaining their incomes. It also explains the cycle cash flow and asset movement as well as the calculation of Net Present Value (NPV) of the project.

Keywords


financial architecture; Ijarah Sukuk; Istisna’ Sukuk; hybrid Sukuk; Islamic securitization; life cycle hypothesis;

Full Text:

PDF

References


AAOIFI, 2007. Shari's Standard No. (21), Financial Paper (Shares and Bonds), s.l.: Accounting and Auditing Organization for Islamic Financial Institutions.

Adilla, F., 2017. 'Hybrid Sukuk' Set to Dominate Future Sukuk Issuances. [Online] Available at: https://Shari’ah.nst.com.my/business/2017/05/243622/hybrid-Sukuk-set-dominate-future-Sukuk-issuances

Ahmed, SHARI’AH., 2010. Islamic Finance at a Crossroad: The Dominance of the Asset-Based Sukuk. Butterworth's Journal of International Banking and Financial Law, 25(6), pp. 366-367.

Al-Amine, M. A.-B. M., 2001. Istina' (Manufacturing Contract) in Islamic Banking and Finance. Kuala Lumpur: A.S.Norrdeen.

Al-Amine, M. a.-B. M., 2011. Gloabal Sukuk and Islamic Securitization Market. Leide,(Boston): Brill.

Ando, A. & Modigliani, F., 1964. "Life Cycle" Hypothesis of Saving: A Correction. American Economic Association, pp. 111-113.

Ariff, M., 2014. Sukuk Securities, New Ways of Debt Contracting. Singapore: John Wiley & Sons Singapore Pte. Ltd..

Cross, C. G. et al., 2012. Islamic Project Finance. [Online] Available at: practicallaw.com [Accessed 28 August 2017].

Dusuki, A. P. D. A. SHARI’AH. & Mokhtar, S., 2010. Critical Appraisal of Shari'ah Issues on Ownership in Asset-based Sukuk as Implemented in the Islamic Debt Market. Research Paper ISRA No. 8.

Ebrahim, M. S., 2016. Lecture notes: Securitization and Sukuk. Durham: Unpublished paper. Durham University, UK..

Ebrahim, M. S., Salleh, M. O. & Sheikh, M., 2014. Rationalizing Hybrid Financial Instruments from an Usuli Perspective. Arab Law Quarterly, Volume 28, pp. 295-306.

Hidayat, S. E., 2013. A Comparative Analysis between Asset Base and Asset Backed Sukuk: Which One is More Shari’ah Compliant?. International SAMANM Journal of Finance and Accounting, 1(2), pp. 24-31.

Jivraj, SHARI’AH., 2017. Faith in Finance - An Introduction to Sukuk Structures. 12 April.

Kuran, T., 1997. Islam and Underdevelopment: An Old Puzzle Revisited. Journal of Institutional and Theoritical Economics (JITE), March, 153(1, The New Institutional Economics Religion and Economics), pp. 41-71.

Latham & Watkins, 2015. The Sukuk Handbook: A Guide to Structuring Sukuk. s.l.:Latham & Wapkins LLP.

Lewis, SHARI’AH. A., 1955. The Theory of Economic Growth. London: Allen & Unwin.

Maierbrugger, A., 2017. Innovative Approach in Islamic Finance: Hybrid Sukuk Issuance. [Online] Available at: http://Shari’ah.gulf-times.com/story/542266/Innovative-approach-in-Islamic-finance-Hybrid-Sukuk

Malaysia, S. C., 2009. Islamic Finance Outlook 2009, Kuala Lumpur: McGraw-HillsCompanies.

Maurer, B., 2010. Form versus Substance: AAOIFI Projects and Islamic Fundamentals in the Case of Sukuk. Journal of Islamic Accounting and Business Research, Volume 1, pp. 32-41.

Modigliani, F., 1986. Life Cycle, Individual Thrift, and the Wealth of Nations. American Association for the Advancement of Science, pp. 704-712.

Renan, E., 1883. Islam and Science. Sorbonne: A Lecture presented at La Sorbonne.

Rushd, I., 1198. Bidayat al-Mujtahid wa-Nihayat al-Muqtasid (The Beginning Point for the Mujtahid and the Ending Point for the Moderate). s.l.:s.n.

S&P, 2016. Islamic Finance Outlook 2017 Edition, s.l.: spglobal.com/ratings.

Sablik, T., 2016. Life Cycle Hypothesis. [Online] Available at: econpapers.repec.org/RePEc:fip:fedrrf:00222

Saeed, A. & Salah, O., 2014. Development of Sukuk: Pragmatic and Idealist Approaches to Sukuk Structures. Journal of International Banking Law and Regulation, Volume 1, pp. 41-52.

Tabreed, 2006. Tabreed 06 Financing Corporation (incorporated in the Cayman Islands with limited liability), Abu Dhabi: Tabreed.

Tariq, A. A., 2004. Managing Financial Risks of Sukuk Structures, Loughborough, UK: Submitted dissertation of Masters of Science, Loughborough University.

Thomas, A. S., 2006. Interest in Islamic Economics: Understanding Riba. London; New York: Routledge.

Usmani, M. T., 1998. Salam and Istisna’. In: An Introduction to Islamic Finance. 128-138: Arab & Islamic Law Series, pp. 1-10.

Usmani, M. T., 2005. Salam and Istisna’. Academia.edu, pp. 1-10.

Usmani, T., 2008. Sukuk and Their Contemporary Applications. [Online] Available at: http://Sukuk.net/library/education/MuftiTaqiSukukpaper.pdf

Zuhayli, D. SHARI’AH., 2001. Financial Transactions in Islamic Jurisprudence. Damscus: Dar Al-Fikr.

Zulkhibri, M., 2015. A Synthesis of Theoritical and Empirical research on Sukuk. Borsa Istanbul Review, pp. 237-248.




DOI: https://doi.org/10.18860/j.v10i2.6922

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Published By:

Jurusan Hukum Ekonomi Syariah
Fakultas Syariah
Universitas Islam Negeri Maulana Malik Ibrahim Malang
Jl. Gajayana No. 50, 65144 Malang, East Java, Indonesia
Telp./Fax.: (0341) 559399
Email: jurisdictie@uin-malang.ac.id

Abstacting & Indexing :

Sinta Portal Garuda Google Schoolar MoraRef

Creative Commons License
Jurisdictie: Jurnal Hukum dan Syariah is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.