Sukuk

Sukuk (Arabic: صكوك, singular: Sakk, meaning 'deed' or 'certificate') are Shariah-compliant investment certificates that represent undivided beneficial ownership interests in underlying assets, usufructs, or services — not pure debt obligations. Unlike conventional bonds, which represent a debt obligation paying interest, Sukuk returns derive from the performance of underlying assets. The global Sukuk market exceeded $800 billion outstanding by 2024. Common structures include: Ijarah Sukuk (backed by leased assets, most common), Musharakah Sukuk (partnership interests), Murabaha Sukuk (receivables-backed), and Wakalah Sukuk (agency-managed portfolios). Sukuk are listed on exchanges in Malaysia (Bursa Malaysia), UAE (NASDAQ Dubai), London, and Luxembourg. Governed by AAOIFI Shariah Standard No. 17 — a landmark 2008 ruling by Sheikh Muhammad Taqi Usmani tightened asset-backing requirements, excluding 'asset-based' Sukuk that relied on repurchase undertakings from issuers.