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Sukuk: The Halal and Promising Sharia Investment

Saturday, July 6, 2019



You can invest in various ways that are in accordance with Islamic principles. One of them is to use investment instruments in the form of sukuk. However, it is a shame that knowledge related to sukuk among ordinary Indonesians is still quite minimal, even though Indonesia is a country with a major Muslim population.

Sukuk is taken from an Arabic word, the plural word of shak, which has the meaning of a legal instrument or certificate. Sukuk are similar to bonds. However, in practice, sukuk are run with sharia principles, in contrast to bonds that are accompanied by elements that are prohibited in sharia principles, namely the use of interest.

You can also find the definition of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) reveals that sukuk is a certificate of ownership that has the same value on an asset, service, benefit right, ownership of a project, or certain investment activities.

Meanwhile, the National Sharia Board of MUI revealed that Furthermore, the issuer must pay income to sukuk holders through the principle of profit-sharing margin and payment of funds when the bonds are due. Furthermore, the issuer must pay income to sukuk holders through the principle of profit-sharing margin and payment of funds when the bonds are due.

In general, there are six characteristics of sukuk distinguishing them from other investment instruments, namely:

  1. Sukuk is proof of ownership of an asset that has a form or has a beneficial title.
  2. Use sharia principles that are free from the elements of gharar, usury, and maysir.
  3. There is a division of income in the form of margins, profit sharing, or compensation in accordance with the type of contract used.
  4. Sukuk issuance is done through special purpose vehicle (SPV).
  5. There is an underlying asset.
  6. Utilization of results based on sharia principles.

 

History of Sukuk as an instrument of modern Islamic investment

Sukuk are often referred to as modern Islamic investment instruments. However, who would have thought that the use of Islamic investment instruments could also be traced in the history of Islam in ancient times? In fact, historians reveal that the use of sukuk can be traced to the 12th century.

The concept of shak can be found in the trade carried by the Jews with Muslim merchants. Evidence of shak use can be found in Cairo's genetic documents. Shak used by these ancient traders has similarities to the concept of check in the modern era.

New modern sukuk were known to appear in 1988 at the implementation of the Council of the Islamic Fiqh Academy which took place in Jeddah, Saudi Arabia. The decision of the conference contains sukuk issued with mudarabah contract. Ownership of sukuk is also used as proof of capital ownership.

Since then, the use of sukuk as a sharia instrument has continued to develop. In 1990, Shell MDS became the first company to issue sukuk in Malaysia. Meanwhile, the first sukuk in Indonesia only appeared in 2002, issued by PT Indosat Tbk.

Furthermore, the Indonesian Government also issued a National Sharia Securities Act (SBSN) in 2008. This law became the basis for the government to issue state sukuk which was later used as a source of funding for infrastructure projects. At present, state sukuk issuance is carried out regularly, both for domestic and international markets.

 

Types of Sukuk

In practice, six types based on the contract. The six types of sukuk are:

  • Sukuk Mudarabah

This sukuk is carried out with the principle of fair profit sharing in accordance with the agreement between the capital owner and the labor provider. Furthermore, the distribution of results is done based on a predetermined agreement.

  • Sukuk Murabahah

Sukuk murabahah involves cooperation between two parties using the principle of murabahah or buying and selling which in practice is facilitated by SPV. Here, the obligator acts as a buyer and investor as a seller. Furthermore, payments can be made in accordance with the agreement by considering profit margins for investors.

  • Sukuk Salam

Sukuk salam allows the obligator to obtain full funds for an asset from an investor. However, it should be noted that funds from investors are used to buy assets of the obligator in the future.

  • Sukuk Ijarah

Sukuk ijarah is a type of Islamic investment that uses the principle of rental. In practice, the investor becomes the owner of the asset and has the right to earn income from the leased assets.

  • Sukuk Musharakah

Sukuk musharakah bears a resemblance to sukuk mudarabah. The main difference being investors of Islamic investment has representatives in companies that play a role in decision making.

  • Sukuk Istisna

Istisna is a contract between the buyer (investor) and the entrepreneur accompanied by a guarantee of the completion of the project by the entrepreneur at a specified time period. Furthermore, investors may rent assets that are completed to other parties, for example, with the principle of ijarah, to make a profit.

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