30 October 2013

A Beginner’s Guide to Structuring Sukuk (Video)

Posted In: Fixed Income, Portfolio Management

At the World Islamic Economic Forum in London yesterday, British Prime Minister David Cameron unveiled plans to issue £200m in Islamic bonds, also known as sukuk. The British government wants London to be an international center of the fast-growing Islamic finance industry, which is forecast to top £1.3 trillion by next year, and with this issue, Britain will become the first non-Muslim country to offer sukuk.

The move is timely. Global sukuk issues have jumped 50%, from about $92 billion in 2011 to $138 billion in 2012, according to a recent report by International Islamic Financial Market (IIFM), a Bahrain-based standard setter in Islamic finance.

Increasingly described as the instrument of choice of the Islamic finance industry, sukuk have also been used by some unexpected entities in the Western world, including the German state of Saxony-Anhalt, GE Capital, and Tesco.

In the short video above, Richard T. de Belder, a lawyer well versed in structuring sukuk, discusses:

What are sukuk?
A basic structure underlying sukuk
Some drivers and issues

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Tags: Islamic Finance, Videos

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About the Author(s)

Usman Hayat, CFA

Usman Hayat, CFA, writes about sustainable, responsible, and impact investing and Islamic finance. He is the lead author of "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals;" the literature review, "Islamic Finance: Ethics, Concepts, Practice;" and the research report "Sustainable, Responsible, and Impact Investing and Islamic Finance: Similarities and Differences." He is interested in online learning and has directed three e-courses for CFA Institute: "ESG-100," "Islamic Finance Quiz," and "Residual Income Equity Valuation." The other topics he writes about are macroeconomics and behavioral finance. He has experience working in securities regulation and as an independent consultant. His qualifications include the CFA charter, the FRM designation, an MBA, and an MA in development economics. He has served as a content director at CFA Institute. He is a former executive director at the Securities and Exchange Commission of Pakistan (SECP) and former CEO of the Audit Oversight Board (Pakistan). His personal interests include reading and hiking.