Sukuk

A sukuk is an Islamic debt instrument issued by government or corporations to finance their operations.

In exchange, the issuer may give out returns (commonly known as “profit”). These profits are paid at a pre-determined intervals (usually annually or semi-annually) and returns the principal on the maturity date.

Suitable for: Conservative to Aggressive investors

Credit Risk

• The payment of the Principal Amount or returns (profits) of this Investment depends upon the ability of the Issuer to make such payments.
  
  

Profit Rates Risk

• The risk that an increase in profit rate may cause the sukuk price to decline in value.
  
  

Currency Risk (For Foreign Currency Sukuk)

• Foreign currency investments are subject to exchange rate fluctuations which may affect, unfavorably or favorably, the effective return on the sukuk.
  
  

Liquidity Risk

• The risk that an investor may have difficulty liquidating their sukuk holdings and may be forced to sell at a significant discount to market value.