Sukuk Stylised Facts

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Journal Title, Volume, Page: 
Master Thesis
Year of Publication: 
Atirah, Hala
Current Affiliation: 
Department of Banking and Finance, Faculty of Economic and Social Studies, An-Najah National University, Nablus, Palestine
Preferred Abstract (Original): 

Sukuk and conventional bonds have been described by the mass media and some scholars to be identical, except for the Islamic regulations that are applied to the Sukuk bonds. Yet Sukuk are becoming a global phenomenon attracting a large group of investors and issuers throughout the continents. Highlighting the differences among both types is a crucial aspect, as these differences reveal the misleading description of their being indistinguishable. In this study the stylized facts of Islamic bonds and conventional bonds aere investigated along with the impact of internal and external elements on their spreads and liquidity. My focus lies in evaluating the internal and external factors of Sukuk in the GCC secondary market for the period 2004-2010 with a comparison to the study of (He et. al 1999), that examined the factors affecting the conventional bonds liquidity in Thailand’s market. The results show that coupon rate, floating and ratings are the most significant internal elements that have an impact on the Sukuk liquidity in the UAE. For conventional bonds, ratings only have a significant impact on their liquidity in Thailand’s market. Moreover, sinkable, callable features along with term to maturity are not significant. For the macroeconomic factors, exchange rates have a significant effect, while the Libor rate and Dubai index are not significant. This is incompatible with the conventional bonds studies, where the latter two are the only significant factors. The regression is examined at 95% level of confidence.

Sukuk Stylised Facts1.09 MB