In all societies, there is some group of owner’s funds and cash savings who don’t have any desire or ability to invest directly in profitable economic activities. On the other hand, many entrepreneurs with knowledge, experience and potential do not have the financial resources required for investment. Money and capital markets with using a variety of financial instruments, play a significant intermediary role between these two groups.

The main goals of Central Asset Management company are establishment and management SPVs, in order to facilitate the implementation of intermediary actions".

Murabahah Sukuk

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  • Monday, 13 June 2016 07:56

One of Bai' contracts is Murabahah Bai' that has been common since the olden years. It means a Bai' in which the seller informs the purchaser of the total price of goods, including the purchase price, transport and maintenance costs and other associated costs. It then requests an amount of money or an extra percentage as profit. For instance it announced that it has purchased a product for one thousand Dollars and it is willing to sell it to the customer for one thousand and one hundred Dollars or with 10% profit. In Murabahah Bai', if the seller lies about the purchase price or the associated costs, the customer would be able to cancel the contract. Murabahah Bai' could be signed both in cash or installments. Installments usually have higher profit rates.
Some Muslim scholars have recently designed Murabahah Sukuk, taking advantage of the features of Bai' Murabahah. In some Islamic countries, such as Malaysia, they are being presented as Islamic bonds.

Definition of Murabahah Sukuk:
It is difficult to provide a comprehensive and exact definition of this type of Sukuk as there are different types of Murabahah Sukuk available. However, it could be said that on the whole, they are securities that the owners (religiously) jointly own a financial asset that has been obtained through a Murabahah contract. The holder of Sukuk is the owner and the creditor is the religion. These securities have fixed return and could be sold at the secondary markets.

Different kinds of Murabahah Sukuk:
Different types of Murabahah Sukuk have been proposed and some are being used. The most significant ones are:
1. Supply Murabahah Sukuk
2. Supply Murabahah Sukuk
3. Murabahah Sukuk for formation of capital of commercial corporations
4. Mortage Murabahah Sukuk

Secondary Market of Murabahah Sukuk
All different kinds of Murabahah Sukuk are profit financial instruments with fixed returns. On this basis, it could be said that it could cover the objectives and tastes of an important groups of owners of extra funds that aim to have riskless investments. As a result, if they do not have any jurisdiction problems, they could be sold and purchased in the secondary markets. In the first, second and fourth type of Murabahah Sukuk, the holder actually owns a financial deed with a definite maturity. Therefore, with regard to its reduction rate, it could be sold with a lower price to a third party (purchaser). The difference of purchase price and face value of the Sukuk will be the return of the investment in Murabahah Sukuk for the purchaser and it will have a fixed rate. In fact, in the third type of Murabahah Sukuk, the holder of the securities is a joint owner of some part of the assets of the issuer of securities (i.e. commercial corporation). Selling the Sukuk, it will transfer its ownership of that joint asset. The purchaser will then become of owner of the asset and consequently, the receiver of the return of the issuer from trading the Murabahah trade. This rate is also almost fixed.