Authors

• Ali Hasan Zadeh
• Aazam Ahmadian

Abstract

The debt markets are an integral part of financial sector, Nevertheless, with regard to the provisions of this matter, claim and interest payments are considered forbidden for Muslims. In countries where Muslims constitute the major portion of the population, they are unable to respond to their financial needs by using the conventional debt markets (based on interest). Hence, in these countries there is significant demand for the development of an alternative debt markets, and compatible with Islamic precepts. As a result, during the last few years, Islamic bonds that comply with Islamic principles and are known as Sukuk, have grown substantially and have been designed by companies and governments. Despite the implementation of Islamic banking and effective attempts in the stock market, still Sukuk issuance is neglected.
This paper has designed an appropriate model for Sukuk and potential emissions of it are calculated. For this purpose, we use two scenarios (total Sukuk issued in the world and issued in Islamic countries) to predict the capacity of Sukuk. Sukuk statistics are extracted and the potential capacity for investment in Sukuk has been estimated for the Periods 1990-2010 and 1353-1387 respectively.

Keywords

• Sukuk
• Investment
• Panel Data
• vector auto regressive (var)