Sukuk and Securitization: Vital Issues in Islamic Capital Markets

This chapter discusses the most vital and recently emerging topics in Islamic finance—sukuk and securitization, elaborating upon the concepts and discussing the procedures. It explains how the concept of sukuk can be used to realize the huge potential of Islamic finance. Sukuk provides a tremendous potential for growth in the global Islamic capital market that is critical for the sustained development of the Islamic finance industry. Their emergence has attracted a large number of investors across the world. Sukuk creates a framework for participation of a large number of people in financing projects in the public and private sectors, including those of infrastructure, such as roads, bridges, ports, airports, etc. A variety of target-specific sukuk can be issued on the basis of various modes, keeping in mind the relevant shariah rules. The creation of Islamic universal Sukuk, structured by IIFM as SPV, fulfilling the shariah essentials of ijarah could serve as a basis to promote cooperation among Muslim countries and their financial markets.