Journal of Islamic Banking and Finance

Comparing Sukūk and Conventional Securities: The Challenge of Consistency
Abdullah Karatas, Volker Nienhaus

Abstract
Sukūk and bonds are legally distinct, but not necessarily in the perception of market players. Empirical studies show differences in yields and in the impact on other financial assets. However, the findings are not conclusive: For example, industry and idiosyncratic risks, qualitative differences between types of sukūk, the role of conventional investors and actual trading practices in OTC markets are not considered. Data have a strong country bias (Malaysia), political support for sukūk (e.g. tax incentives, initial pricing) is ignored, and models are inadequate to explain observed phenomena. The consistent integration of sukūk data, practices and models remains a challenge.

Full Text: PDF     DOI: 10.15640/jibf.v3n2a2